We
keep
the
world
moving.
ANNUAL REPORT
2014
20150302_Kion_GB2014_image.indd 3
03.03.15 23:48
KION Group
Segments
LINDE MATERIAL HANDLING
STILL
The Linde Material Handling (LMH)
segment encompasses the Linde,
Fenwick and Baoli brands.
€3,077.2 million
REVENUE
€339.6 million
ADJUSTED EBIT
13,945
EMPLOYEES
The STILL and OM STILL brands are
grouped in the STILL segment.
€1,850.7 million
REVENUE
€133.6 million
ADJUSTED EBIT
7,976
EMPLOYEES
FINANCIAL SERVICES (FS)
The purpose of the Financial Services (FS)
segment is to act as an internal financing partner
for LMH and STILL, providing finance solutions
that promote sales. FS activities include the
internal financing of the short-term rental fleet,
the financing of long-term leasing business for
the KION Group's external customers, and the
risk management associated with these opera-
tions. In the major sales markets with a high
volume of financing and leasing, this business is
handled by legally independent FS companies.
€620.9 million
REVENUE
€2.1 million
ADJUSTED EBIT
60
EMPLOYEES
BREAKDOWN OF TOTAL REVENUE IN 2014
BREAKDOWN OF ADJUSTED EBIT IN 2014
59.2%
LINDE
MATERIAL
HANDLING
32.3%
STILL
7.5%
FINANCIAL
SERVICES
1.0%
OTHER
76.7%
30.2%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
– 10%
0.5%
– 7.3%
LINDE
MATERIAL
HANDLING
STILL
FINANCIAL
SERVICES
OTHER ¹
1 including effects of consolidation/reconciliation
KION Group
Company profile
Linde is a global premium brand and a
technology leader that has many years
experience of hydrostatic drive techno-
logy. It has also been developing and
manufacturing electric drive systems for
decades and makes the resulting exper-
tise available to external customers for
use in a variety of applications.
STILL is predominantly a global premium
provider of trucks with electric and diesel-
electric drives. It mainly focuses on the
European and Latin American markets.
Its portfolio consists of forklift trucks and
warehouse trucks plus associated ser-
vices. STILL has also positioned itself as
a leading provider of intelligent intralogis-
tics solutions.
The Baoli brand covers the economy
segment in China and other emerging
markets in Asia, eastern Europe, the
Middle East, Africa, and Central and
South America.
<<
S
T
C
A
F
P
U
O
R
G
N
O
I
K
<<
In Italy, STILL products are sold under
the OM STILL brand. OM STILL is a
market leader in Italy and offers both
trucks and fully integrated warehouse
systems, including automation and
fleet management solutions.
Voltas is a leading provider of indus-
trial trucks in India. It manufactures
diesel trucks, electric forklift trucks
and warehouse trucks for the Indian
market and can draw on a network
of more than 50 dealers providing
sales and service.
In France, Linde products are sold under
the Fenwick brand. Fenwick is the biggest
material-handling provider in France. The
product portfolio ranges from warehouse
trucks to heavy trucks and caters to all of
the major application areas. Fenwick and
Linde meet customers’ most sophisticated
requirements in terms of technology, effi-
ciency, functionality and design.
PRODUCTS AND SERVICES
Service contracts
Diesel and LPG forklift trucks
Ad hoc service
Electric forklift trucks
Spare parts
Fleet data management
Automation
Stock management and
transport control systems
Warehouse handling equipment
Rental
RFID systems
Platform trucks and tractors
Used trucks
Racking systems
Direct sale
Leasing
(3rd party providers)
KION leasing via
Financial Services
PRODUCTS
SERVICE
SOLUTIONS
FINANCING
KION Group
Key figures for 2014
KION Group overview
in € million
Order intake
Revenue
Order book 1
Results of operation
EBITDA
Adjusted EBITDA 2
Adjusted EBITDA margin 2
EBIT
Adjusted EBIT 2
Adjusted EBIT margin 2
2014
4,877.3
4,677.9
787.2
714.2
780.4
16.7%
347.0
442.9
9.5%
2013
4,489.1
4,494.6
693.3
708.8
721.5
16.1%
374.2
416.5
9.3%
2012 *
4,590.3
4,559.8
807.8
914.4
700.5
15.4%
549.1
408.3
9.0%
Change
2014/2013
8.6%
4.1%
13.5%
0.8%
8.2%
–
– 7.2%
6.3%
–
Net income 3
178.2
138.4
161.4
28.8%
Financial position 1
Total assets
Equity
Net financial debt
Cash flow
Free cash flow 4
Capital expenditure 5
6,128.5
1,647.1
810.7
305.9
133.1
6,026.4
1,610.0
979.3
195.6
125.8
6,213.2
660.7
1,790.1
513.6
155.1
1.7%
2.3%
– 17.2%
56.4%
5.9%
Employees 6
22,669
22,273
21,215
1.8%
* Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011);
Order intake, Revenue, adjusted EBIT and adjusted EBITDA were aligned due to the sale of the Hydraulics Business
1 Values as at balance sheet date 31/12/
2 Adjusted for KION acquisition items and one-off items
3 Net income 2012 included a net gain from the Weichai transaction in the amount of €154.8 million
4 Free cash flow is defined as Cash flow from operating activities plus Cash flow used in investing activities.
Last year’s figures were adjusted due to a change in presentation, for details see ‘Other disclosures on Consolidated statement of cash flows’
5 Capital expenditure including capitalised R&D costs, excluding leased and rental assets
6 Number of employees in full-time equivalents as at balance sheet date 31/12/
All amounts in this annual report are disclosed in millions of euros (€ million) unless stated otherwise. The addition of the totals pre-
sented may result in minor rounding differences. The percentages shown are calculated on the basis of the respective amounts,
rounded to the nearest thousand euros.
ANNUAL REPORT
ANNUAL REPORT
2014
2014
We
We
keep
keep
the
the
world
world
moving.
moving.
The KION Group has a global presence with
The KION Group has a global presence with
products, services and solutions provided
products, services and solutions provided
by its six brand companies. The KION Group
by its six brand companies. The KION Group
is the European market leader and the world’s
is the European market leader and the world’s
second largest manufacturer of forklift trucks
second largest manufacturer of forklift trucks
and warehouse technology, and it is one of
and warehouse technology, and it is one of
the leading international suppliers in the sector
the leading international suppliers in the sector
in China.
in China.
Linde and STILL serve the premium segment
Linde and STILL serve the premium segment
worldwide, while Baoli focuses on the economy
worldwide, while Baoli focuses on the economy
segment. Fenwick is the material-handling
segment. Fenwick is the material-handling
market leader in France, OM STILL is a market
market leader in France, OM STILL is a market
leader in Italy and Voltas is one of the two
leader in Italy and Voltas is one of the two
market leaders in India.
market leaders in India.
Building on these strong foundations, the
Building on these strong foundations, the
KION Group and its more than 22,000 emplo-
KION Group and its more than 22,000 emplo-
yees generated revenue of €4.7 billion in 2014,
yees generated revenue of €4.7 billion in 2014,
never losing sight of what is most important:
never losing sight of what is most important:
our customers.
our customers.
What
keeps us
moving?
Our
customers.
P.04
Comprehensive.
Fuzhou, China
P.06
Efficient.
ONLINE VERSION
ONLINE VERSION
Budapest , Hungar y
reports.kiongroup.com
reports.kiongroup.com
P.08
Intelligent.
Miehlen, Germany
REGISTER FOR OUR NEWSLETTER
REGISTER FOR OUR NEWSLETTER
P.10
kiongroup.com/newsletter
kiongroup.com/newsletter
Global.
Bladensburg, USA
P.12
P.14
INVESTOR RELATIONS
INVESTOR RELATIONS
Synergetic.
kiongroup.com/ir
kiongroup.com/ir
Jundiaí, Bra zil
Close.
Aurangabad, India
P.16
Profitable.
Soave, Italy
KION GROUP WEBSITE
KION GROUP WEBSITE
P.18
kiongroup.com
kiongroup.com
Motivated.
Tangier, Morocco
ANNUAL REPORT
2014
We
keep
the
world
moving.
The KION Group has a global presence with
products, services and solutions provided
by its six brand companies. The KION Group
is the European market leader and the world’s
second largest manufacturer of forklift trucks
and warehouse technology, and it is one of
the leading international suppliers in the sector
in China.
Linde and STILL serve the premium segment
worldwide, while Baoli focuses on the economy
segment. Fenwick is the material-handling
market leader in France, OM STILL is a market
leader in Italy and Voltas is one of the two
market leaders in India.
Building on these strong foundations, the
KION Group and its more than 22,000 emplo-
yees generated revenue of €4.7 billion in 2014,
never losing sight of what is most important:
our customers.
ONLINE VERSION
reports.kiongroup.com
REGISTER FOR OUR NEWSLETTER
kiongroup.com/newsletter
INVESTOR RELATIONS
kiongroup.com/ir
KION GROUP WEBSITE
kiongroup.com
ANNUAL REPORT
ANNUAL REPORT
2014
2014
We
We
keep
keep
the
the
world
world
moving.
moving.
The KION Group has a global presence with
The KION Group has a global presence with
products, services and solutions provided
products, services and solutions provided
by its six brand companies. The KION Group
by its six brand companies. The KION Group
is the European market leader and the world’s
is the European market leader and the world’s
second largest manufacturer of forklift trucks
second largest manufacturer of forklift trucks
and warehouse technology, and it is one of
and warehouse technology, and it is one of
the leading international suppliers in the sector
the leading international suppliers in the sector
in China.
in China.
Linde and STILL serve the premium segment
Linde and STILL serve the premium segment
worldwide, while Baoli focuses on the economy
worldwide, while Baoli focuses on the economy
segment. Fenwick is the material-handling
segment. Fenwick is the material-handling
market leader in France, OM STILL is a market
market leader in France, OM STILL is a market
leader in Italy and Voltas is one of the two
leader in Italy and Voltas is one of the two
market leaders in India.
market leaders in India.
Building on these strong foundations, the
Building on these strong foundations, the
KION Group and its more than 22,000 emplo-
KION Group and its more than 22,000 emplo-
yees generated revenue of €4.7 billion in 2014,
yees generated revenue of €4.7 billion in 2014,
never losing sight of what is most important:
never losing sight of what is most important:
our customers.
our customers.
ONLINE VERSION
ONLINE VERSION
reports.kiongroup.com
reports.kiongroup.com
REGISTER FOR OUR NEWSLETTER
REGISTER FOR OUR NEWSLETTER
kiongroup.com/newsletter
kiongroup.com/newsletter
INVESTOR RELATIONS
INVESTOR RELATIONS
kiongroup.com/ir
kiongroup.com/ir
KION GROUP WEBSITE
KION GROUP WEBSITE
kiongroup.com
kiongroup.com
Contents
A
22
24
26
36
41
B
44
52
58
C
72
83
112
113
D
126
127
128
130
132
134
238
239
E
242
243
244
245
245
TO OUR SHAREHOLDERS
Letter to shareholders
Executive Board
Report of the Supervisory Board
KION shares
Services for shareholders
CORPORATE GOVERNANCE
Corporate governance report
Disclosures relevant to acquisitions
Remuneration report
GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
Report on the economic position
Events after the reporting date
Outlook, risk report and opportunity report
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Auditors’ opinion
Responsibility statement
ADDITIONAL INFORMATION
Quarterly information
Multi-year overview
Disclaimer
Financial calendar
Contact
2
What
keeps us
moving?
Our
customers.
With the KION Group keeping the world moving,
everything revolves around just one thing –
our customers. From automotive glass in China
to building materials in the USA, or from
packaging in Germany to refrigerators in India:
our customers operate in industries that are
as diverse as the opportunities for adding
value that we offer our customers to help their
businesses succeed. What motivates the
brand companies of the KION Group is a desire
to provide customers with efficient, intelligent
and bespoke solutions for their logistics needs
in conjunction with a full range of premium
services. Across the world.
VIDEOCON
Household appliances
P. 14
Close.
Aurangabad, India
FUYAO GROUP
Automotive and safety glass
0 4
P .
Comprehensive.
Fuzhou, China
HEUCHEMER VERPACKUNG
Packaging
Intelligent.
Miehlen, Germany
P. 08
P. 16
CANTINA DI SOAVE
Winery
Profitable.
Soave, Italy
6
0
P .
3
SZABÓ ÖNTÉSZETI
Foundry
Efficient.
Budapest , Hungar y
0
P . 1
ERNEST MAIER BLOCK
Building materials
Global.
Bladensburg, USA
1 2
P .
CASAS BAHIA
Retail
Synergetic.
Jundiaí, Bra zil
Profitable.
Soave, Italy
1 8
P .
RENAULT TANGER
Automotive
Motivated.
Tangier, Morocco
Comprehensive.
FUYAO GROUP
Automotive and safety glass
Trucks and services from a single source – this is the idea at the core
of the KION business model. It benefits customers such as Fuyao, a
Chinese manufacturer of automotive and safety glass. And is helping it
in its quest to become the worldwide number one in the industry.
FUZHOU
China
FUYAO GROUP
Automotive and safety glass
5
Creating values.
The foundation for success: The KION Group
operates in an attractive market that is growing
faster than global economic output. Between
1980 and 2014, the worldwide market for indus-
trial trucks grew at roughly 1.5 times the rate of
the global economy. Three global megatrends are
driving this growth: industrialisation in emerging
markets, globalisation of world trade and increasing
fragmentation of supply chains and value chains.
The KION Group closely integrates its products
and services. In Europe, more than 40 per cent
of new truck sales are made using one of the
Company’s financing packages. Most financing
contracts are linked to service contracts through
which the customer benefits from KION’s global
service network.
At the end of their ‘first lives’, the trucks return to
the KION brand companies to be refurbished and
sold as used trucks. Alternatively, they help meet
precision logistics demands as part of the rental
fleet. The cycle is completed when long-term cus-
tomers place new orders.
The KION Group business model is increasingly
paying dividends outside Europe as well. In China,
for example, revenue from services provided by
the KION brand company Linde grew by an aver-
age of approximately 15 per cent a year between
2008 and 2014.
The KION Group’s integrated business model
How KION closely integrates its products and services
NE W TRUCK
SALES
R O DUCT
S
P
FINANCIAL
SERVICES
RENTAL
RENTAL &
USED TRUCKS
SERV I C E
S
SERVICE
SOLUTIONS &
AF TERSALES
03
01
01
Ships to car manufacturers around the
world: the Fuyao Group
02
Teng Yu, purchasing director at Fuyao
Group in Fuzhou
03 Linde’s quality and service have convinced
Fuyao since 2003
04 The Fuyao Group sets up new factories –
and relies on Linde
02
T
wo workers carefully lift the huge plate of
ferring to new factories. Fuyao is growing quickly, so
glass onto the table. One of them shears right
there’s always demand for labour.
across it using a glass-cutter. Each takes one half and
places it on a stand. The two men get through around
The company, founded in 1987, is one of China’s great-
seven plates a minute. They are protected by special
est success stories. It focused on quality at an early
gloves and by helmets that look a little like traditional
stage and reaped the rewards of China’s legendary car
straw hats. Waiting at all times next to the three cutting
boom. Today the country is the biggest automotive
tables is a Linde forklift truck that carries away the
market in the world, and Fuyao is the world’s third larg-
glass-holding stands as soon as they are full – on to the
est manufacturer of vehicle glass. The company sup-
next stage of the process in the hall, where each of the
plies glass to vehicle manufacturers around the globe –
panes is cut to a windscreen shape.
including the German powerhouses VW, Audi, BMW
An everyday occurrence at the automotive glass manu-
says head of purchasing, Teng Yu. “The Chinese mar-
facturer Fuyao, in a suburb of the city of Fuzhou on Chi-
ket has largely stabilised. We have therefore shifted our
na’s south-eastern coast. But change is afoot. “This
focus to overseas markets. They are very important for
and Daimler. Its aim is to be worldwide no. 1 by 2020,
work is difficult and dangerous,” says a company
the next stage in our growth.”
spokesman looking at the glass-cutters. “Which is why
it will soon be automated.” At the company, robots are
New tasks for the trucks
gradually taking over work processes such as the cut-
Although Fuyao has a market share of around 70 per
ting and washing of the windscreens. The workers
cent in China, its global market share is only around 25
freed up by this are either operating the robots or trans-
per cent. In the US, the company is building two facto-
04
ries; in Germany it has a branch in Heilbronn. A boom-
Fuyao needs a whole range of different trucks. The
ing international business, in addition to higher safety
spectrum is so broad that the glass manufacturer is
requirements and rising labour costs in China, is one of
known jokingly at both companies as a ‘display cabinet
the factors that is causing Fuyao to rapidly automate its
for Linde products’. Fuyao is one of Linde’s ten biggest
manufacturing. Experts believe that the resulting
customers in China. The company ordered its first
increases in quality, precision and efficiency are critical
trucks in 1995. “We initially tried out several brands,”
if Chinese companies are to enjoy sustained global
says Teng. “It was Linde’s quality and service that
success. China is undergoing a wave of automation,
convinced the Fuyao buyers.” In 2003 Linde became
mainly in the wider automotive sector and in high-tech
the company’s exclusive truck supplier, and it carries
industries. “We are in the process of increasing the level
out servicing as part of the contract. More than 1,000
of automation from 50 to 80 per cent,” says Teng Yu.
trucks made by Linde China are in operation across the
“That’s the same level as in industrialised countries.”
15 Fuyao factories in China and at one factory in Rus-
sia. If they break down, they are repaired on site by ser-
Liu Xueshu is head of the Linde Sales Office in Fuzhou:
vice engineers from KION’s premium brand company.
“Linde is working with Fuyao to develop logistics con-
cepts to adapt the company’s factories to this new,
Two other plants are currently being built – one in
automated style of production.” Teng Yu adds: “As
Wuhan in central China and the other in Shenyang in
automation increases, we need other types of truck –
the north-east. For Shenyang – which will be 80 per
less of the small ones but more of the heavy-duty
cent automated from the outset – Fuyao has ordered
trucks in excess of three tonnes. This is because when
21 new trucks. “Previously it might have been a couple
the glass is packed manually, the package sizes are
more,” says Liu Xueshu. “But that’s OK because auto-
smaller than when robots do this work.” Fuyao manu-
mation is helping Fuyao to grow quickly, which in turn
factures the raw glass it needs for its products at a site
will be to the benefit of Linde.” Fuyao is currently build-
near its automotive glass factory – and that too is
ing either one or two new factories every year. In each
already a largely automated process.
of the past three years, the company has ordered at
At this site, the large forklift trucks bring heavy pack-
is based in the port city of Xiamen in southern China.
ages to the loading bay. Inside are panes of glass that
These orders are far bigger than any previous ones
measure several square metres. Before this stage,
made by Fuyao and exemplify how the two companies
robots cut the ribbon of glass that is extruded from the
are set to continue growing together.
least 100 trucks from the KION brand company, which
furnace, and stack up the panes of glass into packs.
The only work that is done manually is the securing of
the panes with cardboard and foam. Trucks glide
across the spacious hall, forwards, backwards. To
interact with the fast, agile robots, they have to be
highly manoeuvrable, says Teng Yu.
Watch the video online:
reports.kiongroup.com/comprehensive
Efficient. SZABÓ ÖNTÉSZETI
Foundry
The KION Group offers the right product for every application and for
every region, including growth markets such as eastern Europe. Highly
robust, affordable and efficient trucks – like the ones offered by Baoli –
are particularly popular here. And that is something that foundry
owner József Szabó in Budapest appreciates.
BUDAPEST
Hungary
7
A successful multi-brand
strategy for all segments
and regions.
The successful multi-brand strategy is part of the
KION DNA: Linde and STILL serve the premium
segment worldwide while Baoli focuses on the
economy segment. Fenwick is the material- handling
market leader in France, OM STILL is a market
leader in Italy and Voltas is one of the two market
leaders in India. KION’s spectrum of products and
services offers the optimum, most cost effective
solution for every customer in every region.
As part of the Strategy 2020, the KION Group is
consolidating its strengths outside of Europe and
using its multi-brand portfolio to gain new market
share. At the end of 2014, KION North America
followed the example of KION South America and
KION South Asia by bringing together several
brand companies in one regional structure.
The Chinese manufacturer Baoli plays a special
role in the global multi-brand strategy: it is a
economy brand with good potential as volume-
provider, and also supplies platforms for robust
yet affordable trucks to other members of the
KION Group.
Where the growth comes from
(Share of market order intake unit growth 2004 – 2014)
7 %
WESTERN EUROPE
7 %
E ASTERN EUROPE
7 %
CENTR AL /
SOUTH AMERICA
9 %
NORTH
AMERICA
1 6%
REST OF WORLD
Emerging markets
Developed markets
54 %
CHINA
01
01 Unique: “Every statue has its own story”
02
The foundry’s owner: József Szabó
03 Always on duty: The robust Baoli truck
moves eight tonnes a day
04 Szabó: ”My customers know that their
projects are in good hands”
03
02
T
he bitter November cold permeates the plant
shops before achieving his ultimate ambition of having
in eastern Budapest; even the furnace in the
his own foundry, more than over two decades ago.
centre of the hall does little to counteract the freezing
Later, Szabó purchased the Evig Foundry, which since
conditions. Using a large pair of tongs, two employees
1997 has been called Szabó Öntészeti Foundry. Origi-
remove a crucible of molten copper from the flames,
nally it was set up for mass production. In 2007, Szabó
before carefully pouring the metal into casting units on
sold a large part of the company site to concentrate
the dusty floor. It sizzles and sparks fly.
fully on casting works of art.
Statues of all shapes and sizes can be seen standing,
With success: the Hungarian has made a name for him-
sitting and lying on shelves and tables – people, oxen,
self all over Europe. “I not only receive orders from art-
giraffes and garden gnomes. Hungarian soccer star
ists in Hungary, but also from Germany, France and
Ferenc Szusza glistens in bronze in a corner. He will
Austria. Over the years, I have built up a good network
soon have pride of place outside Budapest football sta-
of artists who trust my team to realise their visions.”
dium. “But he is not quite finished,” says József Szabó
with a laugh.
Szabó’s small team of workers have developed a
wonderful understanding. Producing statues requires
It started as a childhood’s dream
precision and craftsmanship. “Each and every one of
Casting art – that was the childhood dream of Szabó,
my 20 employees has artistic talent,” says Szabó.
managing director of the Szabó Öntészeti Foundry.
“My customers know that their project is in good
After university, he gained experience at various work-
hands. We don’t produce the works of art in series.
04
Sometimes, we produce medals in greater numbers,
Without it, we wouldn’t be able to fulfil our customers’
but almost every sculpture, whether large or small,
orders so quickly and continue to build on our good
is unique.”
reputation.”
Baoli forklifts get the job done swiftly
When artists commission Szabó Öntészeti to produce a
In the workshop, an employee is removing a huge
statue, they usually come to Budapest in person and
bust from its mould with an ear-piercingly loud hammer
bring a plaster model. It usually takes just one to two
drill, creating a swirling cloud of dust. A door opens
weeks until the work is finished, depending on the size
and a forklift truck rolls in. The Baoli diesel truck drives
and complexity of the order. “We have a reputation for
up to the statue, picks it up on its forks, turns and
working quickly and with care. Another reason why art-
leaves the hall. “You could, of course, carry some stat-
ists from all over Europe come to us in Budapest.”
ues from A to B by hand,” says József Szabó, “but
that would require several employees and I need their
You don’t have to visit the small workshop in the east-
manpower elsewhere. And that’s why our truck is in
ern part of the Hungarian capital to admire the talents
use every day.”
of József Szabó. The restoration of the statues on
Heroes’ Square in Budapest is his work. Is that some-
Trucks bearing the Chinese brand Baoli, part of the
thing he is proud of? “Not overly,” he says, shrugging
KION Group since 2009, were mainly used in China to
his shoulders. “The way I see it, there aren’t any impor-
start with. Now, almost 40 per cent of the econo-
tant and unimportant pieces – every statue has its own
my-level trucks are exported, with eastern European
unique story.”
countries such as Hungary being one of the target mar-
kets. As a result, Baoli has become the third global
brand company in the KION Group. While Linde and
STILL serve the premium markets, Baoli trucks are
renowned for offering good quality at affordable prices.
And that is something that József Szabó appreciates.
“The Baoli truck is ideal for our needs. It transports
eight tonnes of goods around our site every day.
Watch the video online:
reports.kiongroup.com/efficient
Intelligent. HEUCHEMER VERPACKUNG
Packaging
Automation is a key trend in intralogistics. For customers like Heuchemer
Verpackung, the KION Group always comes up with intelligent solutions:
innovative, tailor-made, offering real customer benefits.
MIEHLEN
Germany
9
Offering customers
unique opportunities
to add value.
Industry 4.0, automation, integrated logistics
and IT, and lithium-ion batteries – these are key
trends in the material handling industry, too.
By 2018 the KION Group wants a significant
number of its electric forklift trucks and ware-
house trucks to be fitted as standard with lithi-
um-ion batteries, which have a far higher
energy density than conventional batteries.
In just a few years’ time, the operating costs
should fall well below those of existing drive
systems.
The KION Group also provides sophisticated
solutions for automation. Trucks that move as
if by magic are already meeting the highest
standards in safety, reliability and round-the-
clock operation. They can be used for all kinds
of applications, including delivering parts to an
assembly line, collecting finished products and
transporting to high-bay racking. Automation,
like lithium-ion batteries, is a growth market for
the KION Group.
How the KION Group plans to ramp-up its offering
Share of li-ion truck models of electric
and warehouse trucks
100 %
75 %
50 %
25 %
0 %
2013
2014
2015
2016
2017
2018
Lead acid
Li-ion
01
01
A pallet’s journey: they are brought to the
stretch machine by manual lift truck and
automatically to the high rack
02
Christian Heuchemer (right), managing
director, and Thomas Schmitt, the plastics
plant’s manager
03 High-quality packaging: made of plastic,
corrugated board and wood
04 “We plan to automate our intralogistics.
That’s why we need our partner STILL”
03
02
Y
ou can taste the plastic in the warm air of the
Specialising in plastic, corrugated cardboard,
factory. A huge machine is producing a never-
and wooden packaging
ending stream of gold-coloured plastic blocks before
In the production hall, which is roughly half the size of a
an employee casts a critical eye over them. Any defec-
football pitch, Heuchemer Verpackung manufactures
tive blocks go straight into a wire mesh crate, while the
plastic packaging for customers in a variety of sectors,
flawless articles are deposited in a cardboard box as
including food and beverages, consumer products, auto-
tall as a person. If you look carefully, you can see that
motive, electronics, construction and chemicals. Plastic
the blocks are actually stacks of inserts used in boxes
and corrugated cardboard packaging from Miehlen,
of sweets. The machine takes less than half an hour to
close to the German city of Koblenz, are two of the three
make 1,000 of them from a gold-coloured plastic film
business lines of this family firm, which was established
that is subjected to pressure of 20 tonnes and a tem-
by the great-grandfather of Christian Heuchemer and
perature of 200° centigrade.
his two sisters as a manufacturer of wooden packaging
in nearby Bad Ems almost 100 years ago.
“Once one of the cardboard boxes is full, we use a
hand pallet truck to transport it on a pallet to the stretch
Today, business is flourishing more than ever before.
machine,” explains Christian Heuchemer, managing
This is due to the popularity of discount supermarkets,
director of Heuchemer Verpackung GmbH & Co. KG.
which do not unpack their products in their stores and
The machine tightly wraps the box and its pallet in clear
instead simply place them on the shelves still in their
film. The route taken by the truck passes a number of
packaging. Special requests are no problem for Heu-
other machines pounding away. To maintain hygiene,
chemer Verpackung, which has more than a dozen
the people working at them wear white caps.
developers at the ready. Heuchemer Verpackung itself
04
builds the unique and powerful tools with which it
to the belt, brakes gently and raises its fork prongs as it
shapes and die-cuts the packaging, thereby ensuring
approaches the pallet.
the high level of quality that its customers expect.
Less than a minute later, the iGoEasy reaches the buffer
In order to free up capacity and space for new ideas,
rack with its load and places the pallet in the correct rack
the company has automated most of the processes in
channel of the twelve available. A light barrier identifies
its factory buildings. “Now we want to automate our
the pallet and activates the chain conveyor that pulls it
intralogistics as well,” explains Christian Heuchemer.
through the channel. It is then collected by a very narrow
“What is important to us is the strategy for the overall
aisle truck (VNA) at the back of the buffer rack. The VNA
system, not just the quality of an individual truck. That’s
picks up the pallet and whizzes backwards along the
why we need our partner STILL.” Thomas Schmidt,
narrow aisle of the high-bay storage facility while lifting its
manager of the plastics plant, adds: “Heuchemer is a
driver and the pallet to a height of up to 16 metres. The
flexible and innovative company, and we demand the
more than 1,000 rack channels contain more than
same of our logistics partner.”
10,000 storage bays. Once it has reached the necessary
Launch of fully automated intralogistics
STILLPalletShuttle, which takes it to the storage bay in
height, the VNA places the pallet on a semi-automated
STILL iGoEasy provided Heuchemer Verpackung’s entry
the channel.
into fully automated transport technology – a “truck
off-the-shelf that we can program for our processes
“By working closely with STILL on our project, we have
ourselves,” says Heuchemer. An iPad is used to indi-
created a unique system for our company,” concludes
vidually configure, control and monitor the truck, while
Schmidt, the plant manager. He adds that Heuchemer
reflectors have been attached to the racks in order to
Verpackung is monitoring the system carefully in order
guide the truck along its route.
to make decisions about future developments. After all,
The pallets containing the cardboard boxes that have
within the foreseeable future,” says Schmidt.
“we want to fully automate the movement of goods
been wrapped up by the stretch machine are removed
from the roller belt by the iGoEasy truck, which then
takes them to the buffer rack. Usually, the iGoEasy
receives its orders from the iPad, but in this case a
scanner records all of the pallets at the end of the roller
belt and sends the orders. Silently the truck then moves
Watch the video online:
reports.kiongroup.com/intelligent
Global. ERNEST MAIER BLOCK
Building materials
People like building materials manufacturer Brendan Quinn from Maryland are
very much aware that the USA is a growth market. After all, his industry is
booming. With its global reach, the KION Group wants to harness the potential
of North America’s upturn. Quinn is happy to confirm that KION products are
a reliable choice.
BLADENSBURG
USA
11
Making further inroads
in growth markets.
The KION Group has its eye firmly on key
growth markets for its products such as China
and North America. It is taking an active
approach – with the right brand strategies, the
right, competitive products, the right sales
models and the right local partners.
The Strategy 2020 is focused on the North
American market, consisting of the USA (the
world’s second-largest single market), Canada
and Mexico. In the coming years, the KION
Group aims to considerably improve its share of
this market, which stands at about one per cent.
The Company has a solid basis on which to
build. In the USA, the KION Group operates a
production plant in Summerville, South Caro-
lina, with an annual capacity of over 10,000
trucks. It also has a nationwide network of
around 60 dealers with more than 100 sales
outlets.
Under the umbrella of KION North America, the
brand companies Linde and STILL are to con-
tinue serving the requirements of the US, Cana-
dian and Mexican markets with a comprehen-
sive, customised and complementary product
portfolio. The medium-term plan is to establish
a fleet management system and offer financing.
North America’s and Mexico’s market for new
industrial trucks (USA, Canada, Mexico, in thousands)
229
209
200
150
141
189
177
100
50
0
2010
2011
2012
2013
2014
01
01
Tough job: “We put our forklift trucks
through so much”
02 Brendan Quinn: Ernest Maier’s CEO
03 The Bladensburg site produces ten to
eleven million concrete blocks a year
04 ‘Lindy’: the “Mercedes of the forklift world”
03
02
T
he red truck is covered in so much dust that
“What makes us stand out from other companies is the
you can hardly make out the Linde logo. With a
service we offer. We take charge of the whole supply
“Each block is good as cash”
pallet of heavy cement blocks on its forklift, the truck
chain personally – that includes loading up and unload-
rolls across the yard at Ernest Maier Block, a manufac-
ing – whereas our competitors have to rely on outside
turer of concrete blocks in Bladensburg in the US state
help. Things can sometimes get broken, which rarely
of Maryland. Driver Jerome Chew skilfully places the pal-
happens to us,” says Brendan Quinn, the 42-year-old
let on the wide bed of a delivery truck, then steers the
CEO of the family-owned company that dates back
forklift towards his next load. ‘Lindy’, as Chew and his
more than 80 years and has German roots. He carefully
colleagues affectionately call the forklift truck, stirs up
hand-picked his 125 or so employees. “We need forklift
concrete dust with its tyres. Thudding noises come from
truck drivers who are just that little bit better than the
the machines in the open building across the yard,
rest. For me, every concrete block represents hard
where the compressor hisses and the cement conveyor
cash. So, if one of them falls off the truck, it is as if you
clatters away. This Ernest Maier factory alone produces
are ripping up dollar bills,” continues Quinn. That’s why
between ten and eleven million concrete blocks every
he pays much higher wages than most mid-sized com-
year. Following the economic difficulties of the financial
panies, as well as making contributions to health insur-
crisis, the construction boom now taking place in the
ance and pension funds – which are by no means a
USA needs materials to keep it going.
given in the USA.
04
The only answer was to start piling them up. Of
course, that’s only an option if you have sturdy equip-
ment. “We put our forklift trucks through so much,
It’s no wonder that Quinn feels a bit like the “mayor of
they’re worked really hard. That’s why we chose Linde
a small town,” as he puts it. His arrival represented
trucks, which can lift higher and take more punish-
a major career change, switching from banking to the
ment,” explains Hank Keeney, Vice President and
concrete block business aged just 23 years old.
Chief Operating Officer at Ernest Maier. He added that
“I wanted to do something more tangible. And this is
Linde had proven highly reliable in terms of mainte-
a business that deals with people,” he adds. Things
nance too. There are two forklift trucks in use on the
weren’t going so well for the company, based near the
yard, which have a phenomenal 30,000 operating
capital Washington, as the founding family had over-
hours under their belts. Other trucks would have given
stretched themselves in terms of their investment in the
up the ghost after only half that, he says. “Linde is the
business. Quinn helped get the company back on
Mercedes of the forklift world.”
track, a few years after his arrival he was running the
company – and expanding it.
Linde forklifts are in use everywhere at Ernest Maier,
not only for loading and unloading delivery trucks. They
President Obama came to visit
are also invaluable when moving the still-damp blocks
News of his success story reached the White House,
from the production machine into the hot kilns. Whilst
and in October 2010 President Barack Obama even
other manufacturers have long since automated this
came to visit Ernest Maier Block, where he gave a talk
step of production, Brendan Quinn stands by tried-and-
on the future of America’s economy. Obama described
tested methods to produce the grey stone blocks. “We
“bricks and blocks” as essential to America’s recovery
are still a bit old-fashioned in that respect,” explains the
from the recession, and said that he was very proud of
CEO. “We find that humans on forklift trucks have fewer
this company.
breakdowns than machines on rails.”
Since the US economy has moved back into growth,
business has also begun to boom in the all-important
construction industry. Ernest Maier is doing better than
ever: twelve men work in two shifts per day, six days a
week. At the main plant in Bladensburg they’re running
out of space to dry and store the blocks.
Watch the video online:
reports.kiongroup.com/global
Synergetic. CASAS BAHIA
Retail
Located near São Paulo, South America’s largest warehouse resembles
a beehive. Productivity is a very valuable asset here. Smooth-running
logistics calls for highly sophisticated integration – as provided by the
KION Group’s modular and platform strategy, which leverages the
global synergies of its brands.
JUNDIAÍ
Brazil
13
Harnessing potentials
through cross-brand
modules and platforms.
The KION Group is more than the sum of its indi-
vidual parts. Its strategy of using shared modules
and platforms, part of the wider Strategy 2020,
is key to making further long-term profitability
gains. And it provides the basis for a global and
successful portfolio of trucks that caters specifi-
cally to all markets and segments.
In Europe, the Linde and STILL premium brands
share modules that can be used wherever com-
mon standards reduce costs. The characteristics
of a Linde or STILL truck will not change. But cus-
tomers will benefit: from lower purchase prices
and running costs.
Outside KION’s core market, trucks in the volume
and economy segments are based on cross-
brand platforms that enable rapid market penetra-
tion with proven technologies. The R&D team in
Xiamen in southern China develops the platform
that is then adapted to local requirements in the
various growth markets. Successful localisation
projects include the use of Baoli-brand trucks as
a basis for products in India and Brazil.
How the KION platform strategy works
R&D center
Europe
R&D center
Baoli
R&D center
Asia
R&D center
India
R&D center
North America
R&D center
South America
01
01
Centro de Distribuição: The distribution
center in Jundiaí is the largest center of its
kind in South America
02
Edgard Liberali Filho, head of the logistic
unit at Via Varejo
03 Up to the ceiling: Several tens of thousands
of articles are stored and moved in the
warehouse
04 Casas Bahia is part of the Via Varejo Group,
one of the world’s biggest retailers of elec-
trical goods and household appliances
03
02
F
rom above, it looks a bit like a scene from a
the following morning approximately 6,700 consign-
funfair. Dozens of men stand on warehouse
ments will have been sent on their way from Jundiaí. In
trucks. They rattle through the aisles and zoom around
this huge country, it’s not uncommon for them to travel
corners, their brakes squeaking. The workers, dressed
the same distance as from Paris to Moscow.
in blue and yellow overalls, steer their order pickers with
the same intensity as small boys in bumper cars – and
960 people work here in three shifts; seven days a
they appear to be having just as much fun. But here in
week and around the clock. Using 163 order pickers,
the Centro de Distribuição, instead of ramming into
87 forklift trucks and eight tow tractors, all made by the
each other, they load up incoming goods such as
KION brand company STILL, they move everything
fridges, mattresses and gas ovens and transport them
from bicycles and hi-fis to flat-pack furniture and pres-
to their destination.
sure cookers. In a precision-planned operation, the
goods that arrive at the warehouse end up on the
The Centro de Distribuição, or CD for short, is arranged
opposite side of the building, where individual consign-
in a giant L amid gently rolling hills in Jundiaí, just 50
ments that have been sorted by zip code are dis-
kilometres from the Brazilian metropolis São Paulo.
patched to dealers, shops and homes.
With a footprint of 160,000 square metres – the size of
more than 20 football pitches – it is the biggest goods
By the time the trucks arrive, address labels have been
distribution centre in South America. From half past five
produced for each item, specifying precisely where in
in the morning, suppliers’ trucks bring in goods from
the warehouse each package, fridge or sofa is to be
production sites across the region, and by three o’clock
stored. At peak times, such as in the run-up to Christ-
04
mate as much as possible – in goods inward we are still
using lots of manpower, and that’s hugely unproduc-
mas or Mother’s Day, dozens of trucks wait outside for
tive,” says Francisco Tarosso, head of the CD. The lat-
their turn. The warehouse is packed right up to the ceil-
est acquisitions are tow tractors with multiple trailers
ing. “Sometimes, 35,000 TVs arrive here in three days
which make it easier to unload and distribute goods.
that will then be sold in the three days after that,” says
They buzz up and down the 530-metre-long ware-
Marcos Antônio Spoldari, who coordinates the incom-
house, loading and unloading goods at pre-determined
ing goods operation.
points like a bus picking up and dropping off passen-
gers. This ‘bus stop’ system reduces the volume of traf-
From peddler to entrepreneur
fic and saves space and manpower.
Marcão, or “big Marcos” as his team respectfully call
him, started work more than 30 years ago as a casual
The electric motors hum, the rubber wheels squeak on
worker at Casas Bahia, and he knew the company’s
the concrete floor, the forks and lift masts clatter end-
founder personally – the Polish immigrant Samuel Klein.
lessly. Without order pickers, forklifts and tow tractors
Klein started out as a peddler, before opening his own
the CD in Jundiaí would come to a standstill. “So that
shop. At first, he tapped into the potential of customers
logistics can keep pace with productivity here, it’s par-
from the lower rungs of society. He allowed them to pay
ticularly important that the devices are low-mainte-
in up to two dozen instalments, even if they didn’t have
nance and don’t break down,” says Edgard Liberali
a bank account. Samuel Klein gave them access to
Filho, the centre’s logistics director. “Almost all the
consumer goods that they could previously only dream
products we use here are made by STILL. Some of
of and he achieved commercial success on an unprec-
them have been running reliably for 15 years.” With a
edented scale. Before his company was merged with
smile, he adds: “We just have to repaint them from time
another in 2009, it was turning over around 14 billion
to time, because some of the gaps between the metal
reais a year. Today the Casas Bahia stores are part of
shelving units are so narrow that it’s impossible to avoid
the Via Varejo Group, one of the world’s biggest retail-
scratches!”
ers of electrical goods and household appliances.
Huge savings thanks to automation
In 1997 Klein had the Centro de Distribuição built in
Jundiaí, which now dispatches goods valued at around
six to seven million reais on a daily basis. Its processes
are continuously being perfected. “We want to auto-
Watch the video online:
reports.kiongroup.com/synergetic
Close. VIDEOCON
Household appliances
Always being close to the end customer is as essential to Videocon as it is to
the KION Group. The washing machines, fridges and microwaves from this
Indian household appliances manufacturer provide invaluable help to millions
of people. And the trucks are just as invaluable to Videocon.
AURANGABAD
India
15
Efficient production
via a global network.
The KION Group continually invests in efficient,
modern production facilities – around the world.
By 2021, around €83 million will have been
spent on making the core Linde and STILL
plants in Aschaffenburg and Hamburg even
more competitive. From 2016 onwards, KION’s
new plant in Stříbro in the Czech Republic will
initially be making existing warehouse technol-
ogy products, with volume and economy trucks
to follow later.
In China, the KION Group is expanding its
plant structure, including at the headquarters
of Linde Material Handling in Xiamen and in
Jingjiang, the home of Baoli. In Brazil, a state-
of-the-art production facility came on stream
in 2013. And from its base in Pune, the KION
Group is tapping into the huge potential of the
Indian market. As always, the objective is to
manufacture the trucks as near as possible to
the end customers.
The KION Group’s global production sites
Summerville
Indaiatuba,
São Paulo
Pune
Aschaffenburg
Chatellerault
Jingjiang
Xiamen
Hamburg
Stříbro
Reutlingen
Luzzara
01
03
01
Enormous export trade: among others to
China, Korea, Sri Lanka
02
D.K. Singh: divisional general manager
at Videocon
03 “Our trucks are essential. Each is equivalent
to eight employees”
04 Due to great demand: the Aurangabad site
produces 100,000 refrigerators a month
02
T
he vast factory building belonging to Video-
Lanka. In India, Videocon is the market leader for
con has a calming feel about it, and the drive
washing machines and is among the top five for televi-
through the chaotic streets of Aurangabad, around 250
sions and refrigerators.
kilometres north-east of Pune, is soon forgotten. Here
at the factory, hundreds of refrigerators are packed in
Videocon manufactures 3,000 refrigerators a day
brown cardboard boxes and stacked one above the
Over 350 lorries loaded with Videocon appliances head
other. The black and yellow forklift trucks from the
out across this vast country every day. In the refrigera-
KION brand company Voltas are efficiently carrying up
tor assembly hall in Aurangabad, the production lines
to six at a time, back and forth between the warehouse
never stand still. Depending on the season, the daily
and the lorry that is parked outside the factory gate.
output is in excess of 3,000 units. And yet there is no
Thirty-two trucks are in continuous operation.
sense of chaos in this clean and well organised factory.
Videocon is one of the largest companies in India and
A forklift truck is positioned at the start of the refriger-
specialises in the production of electrical home appli-
ator production line. It is supplying the punching
ances. Founded in 1979, the company today meets
machine with shiny white plastic sheets from which
high levels of quality that are certainly on a par with
the inner liner is formed. Men and women wearing
the technology standards of Japan or countries in the
light grey t-shirts and gloves are fitting prefabricated
west. Exports are running at unprecedented levels,
components, many of which are imported from China
mainly to markets such as China, Korea and Sri
and Korea, on long production lines. They start by
04
threading cables through eyelets before fixing the cas-
Vijay Potdar, manager of operations of Trinity, an author-
ing on the metal housing. Further on, less than five
ised Voltas dealer in Aurangabad, sees a great benefit
metres away, the freezer compartment is fitted. Lastly,
in manufacturing forklift trucks locally at affordable
the motor and cooling fins are soldered on.
prices. “But it’s not only that,” he says. “Voltas trucks
are perfect for India. They are suitable for all kinds of
Refrigerators may be a part of everyday life in the west
terrain and they are robust, even in extreme climate
but in India they are much more than that: they are lux-
conditions from minus two to plus 50 degrees.” Videocon
ury items. Rather than being tucked away in kitchens,
is now planning the next stage of its modernisation: to
they are positioned in the middle of living rooms. Video-
replace its diesel trucks with quieter electric forklifts.
con caters to the requirements of the market by pro-
Spare parts are available from a Voltas service centre
ducing appliances not only in white, but also with col-
in Aurangabad.
ourful doors decorated with flowers and stripes.
Videocon is looking to expand further and plans to
Middle class: new purchasing power
open another factory in the far south of the country.
The company owes its meteoric success to the growth
Staying loyal to the Voltas brand, it has already
of the middle class in India following the deregulation
expressed an interest in purchasing additional forklift
of industry in the early 1990s. Since then, many families
trucks for the new factory. Looking ahead to the future,
have managed to improve their social and financial
the company intends to manufacture the majority of the
standing, often coming from conditions of extreme
components in-house so that it is not dependent on
poverty. Purchasing power is growing and the market
Chinese and Korean imports. It is not only India’s new
for electronic household goods is booming. “Indians
Prime Minister Narendra Modi who wants the ‘Made in
are selective in their purchases,” says Videocon divi-
India’ label to become a real mark of quality.
sional general manager, D.K. Singh. “We have to offer
value for money.”
The consumption habits of the Indian people also place
considerable demands on production. “We make eighty
per cent of our revenue between October and Decem-
ber during the Indian festival season. It would not be
possible to achieve this without our forklift trucks. One
truck is equivalent to eight employees.”
Watch the video online:
reports.kiongroup.com/close
Profitable. CANTINA DI SOAVE
Winery
Quality is crucial at wine-maker Cantina di Soave, whether in its wines
or in its trucks. That is why the cooperative not only obtains its trucks
from the KION Group but also uses its services. In turn, these services
ensure a stable level of revenue and profitability for the Group.
SOAVE
Italy
17
Strengthen resilience
through improved
capital efficiency and
higher margins.
When it comes to profitability and capital
efficiency, the KION Group benefits from global
synergies and economies of scale, shared
modules and platforms, an in-market pro-
duction network and a strategy of optimised
manufacturing.
A wide range of services – including customer
services, truck hire and sales of used trucks
and spare parts – ensures a stable flow of reve-
nue and attractive margins. The service offering
is currently being expanded with the addition of
automation solutions and fleet management.
The service business already contributes more
than 40 per cent of the KION Group’s revenue.
Around 1.2 million KION trucks are in operation
around the world. The KION Group has po -
tential here to grow its service business even
further. It will do so through approximately
1,300 sales and service outlets that are situated
near to customers so that support for products
can be delivered quickly and efficiently when
required.
Resilient service revenues
The KION Group’s global revenues (in €bn)
5
4
3
2
1
0
2.4
1.8
1.8
1.6
2.7
2.5
2.6
1.9
2.0
2.1
2010
2011
2012
2013
2014
New business
Services
01
01
Cantina di Soave: wine cooperative with
2,200 members and 5,500 hectares
under vine
02
The winery’s technical director:
Filippo Pedron
03 Team effort: The cooperative delivers more
than 100,000 tons of grapes each year
04 STILL trucks carry bottles to the bottling
plants and warehouse
02
I
t’s a picture-book slice of Italy. The old town of
wine a year at its six sites. They are the fruits of a care-
Soave is set amidst scenery dotted with cypress
fully coordinated production process.
trees and vine-clad hills and is towered over by a medi-
eval castle. Even if you’ve never visited, you’ll have seen
Since 2008 the company has been using forklift
the name on the labels of wine bottles. This small town
trucks made by OM STILL. “Our production processes
lends its appellation to the most important export of the
don’t make any excessive demands on the trucks,”
Veneto region and one of the best-known wines of Italy:
says Filippo Pedron, oenologist and technical director
the Soave Classico.
of the Cantina di Soave. “Extreme temperatures, high
humidity, toxic substances: the forklift trucks here don’t
The wine is made by growers such as the Cantina di
have to cope with any of this. What’s all the more
Soave. With around 2,200 members and more than
important to us is that we are able to rely on the tech-
5,500 hectares under vine, this wine cooperative is one
nology at all times.” This includes transporting the
of the region’s largest producers – and also one of the
grapes into the chilled warehouses, where they are
oldest, having been founded back in 1898. Countless
left to ripen on hundreds of pallets for up to three
wooden casks, filled with the cooperative’s finest
months, bringing consignments into the pressing and
wines, are lined up one after another in long vaulted
bottling plants and loading up the delivery lorries. The
cellars. However, the winemaking itself is done mainly
fleet is involved in almost every stage of the production
in the neighbouring modern stainless steel vats. The
process – breakdowns can have dramatic economic
Cantina di Soave makes more than 30 million bottles of
consequences.
04
03
Watch and learn at the “experimental vineyard”
The Cantina di Soave offers its members support in the
form of quality assurance seminars and its very own
experimental vineyard, which offers stunning panoramic
STILL trucks: economic and versatile
views across Soave. At high season in October, when
One of the main reasons Pedron puts his trust in the
all the grapes have been harvested and the wine pro-
Italian variant of the KION brand company STILL:
duction can begin, the vines take on a deep orange
“The battery is no different than those of other brands –
hue. The vineyard is then mainly a tourist attraction.
but it lasts longer,” he says. STILL forklift trucks,
Spring, however, is when the wine experts of the Can-
thanks to their state-of-the-art technology, use less
tina di Soave show their members how to cut the vines
power than other models. Another key feature is their
in order to get the best results, and tell them which
manoeuvrability. Some 13,000 bottles of wine are
grape promises to be of particular quality this year.
filled every hour when production is at full capacity at
Filippo Pedron: “At the end of the day, if every one of
the Cantina di Soave. With all the traffic this generates
our members can get the best out of their vineyards,
and with the fragile nature of the products being
we all benefit.”
transported, it is essential that the forklifts are precise
and easy to operate.
For Pedron and his team the focus is very much on
quality rather than quantity. And that goes as much for
The trucks help everything to run like clockwork and
the forklift trucks as it does for the wine. There are no
safeguard the company’s success. At the Cantina di
plans to expand production volume in the years ahead.
Soave it’s not just about the bottom line: “We don’t want
And so the Cantina di Soave truck fleet is initially not
to grow for growing’s sake. It’s more important that
expected to grow. Nevertheless, the cooperative’s part-
we deliver the best quality and that we continually work
nership with OM STILL holds further potential. For qual-
to improve this – that doesn’t necessarily translate into
ity reasons, any decommissioned trucks made by other
market share,” says Pedron.
manufacturers will be replaced by OM STILL equiva-
lents in the future.
The idea of the cooperative is a simple one: wine-
makers pool their expertise and resources in agricul-
ture, business and science in order to produce wine
in a more efficient way and to market their products.
This gives them freedom to hone their vinicultural
craft. “Whereas the winemakers once simply sold on
their grapes after the harvest, they are now part of a
proper value chain,” says Pedron.
Watch the video online:
reports.kiongroup.com/profitable
Motivated. RENAULT TANGER
Automotive
Motivated employees are the bedrock of innovation, quality, competitiveness,
growth and the opening up of new markets – such as Africa. One of the
beneficiaries is Renault in Tangier, where it is making speedy progress thanks
to its dependable trucks from the KION Group.
TANGIER
Morocco
19
Promoting employees
with a passion for
innovation, quality
and customer focus.
To serve successfully the markets of tomorrow –
such as Africa – you need the best and most
motivated employees.
A committed developer of people, the KION
Group has exported the German dual vocational
training model to China. Offering training courses
and giving people scope to develop are as
important to business success as having lean
and efficient processes. This is how the KION
Group is fostering a passion for innovation,
quality and, ultimately, customer satisfaction.
An ongoing optimisation of processes, also in
support functions, is another element of the
Strategy 2020 that is designed to make the
Company more competitive and lay the founda-
tion for further growth.
KION Group employees by country
(full-time equivalents as at 31 December 2014)
6,025
OTHER
1,749
UNITED
KINGDOM
3,162
FR ANCE
22,669
WORLDWIDE
8,264
GERMANY
3,469
CHINA
01
01
Lodgy, Dokker, Sandero: three Dacia
models manufactured in Tangier
02 In charge for material handling at Renault
in Tangier: Mohammed el-Bakrimi
03 110 Fenwick trucks help to produce
800 cars a day
04 Time to pray in separate areas
03
02
R
ed, white and black cars yet to be fitted with
El-Bakrimi spent two months learning how to instruct
interiors hang one and a half meters up in
workers in assembly. He has since gone on to become
the air, suspended from yellow grippers. Lodgy, Dokker
head of material handling at the factory, making sure
and Sandero are the three models produced by the
that engines, panels, seats and screws reach the
Renault-owned Dacia brand in the factory in Tangier,
assembly line at the right time. Computers monitor
Morocco. As for which of these models the shiny new
what needs to be where when. The materials are stored
car bodies will emerge as, that’s something that only
on huge racks ten metres high, right at the back of the
someone like Mohammed el-Bakrimi can know.
factory building. “This is where the forklift trucks per-
form their ballet moves,” declares el-Bakrimi with pride.
The 43-year-old has worked for Renault since the Tangier
110 trucks from Fenwick, KION’s French regional
factory opened back in 2012. Like many others, he
brand, are put to work in the Renault factory, delivering
moved to this up-and-coming city on the Strait of Gibral-
parts to the assembly lines at the precise minute they’re
tar especially to take up one of the 5,000 or so jobs
needed. That’s why they can be seen darting up and
offered by Africa’s biggest car factory. The father of two
down the long aisles, sometimes at breakneck speeds.
children from the Casablanca region has always been
fascinated by car engines and bodywork: “I used to run
Each day, 800 cars roll off the assembly lines
a car workshop.” Nevertheless, when he joined Renault
“Sometimes there are accidents,” admits el-Bakrimi. All
he had to start where nearly all new employees do:
the more reason for the man who never takes off his grey
inside the long and narrow training centre that stands
cap, not even at mealtimes, to value anything that
right by the entrance to the 300-hectare factory site.
improves safety. For example, the BlueSpot warning sys-
04
carbon emissions. Over a dozen wind turbines can be
seen turning in the hills around the factory, supplying
electricity to the site. The hot water used in the paint-
shop is heated using biomass obtained from the stones
of Moroccan olives.
tem – an intense blue spotlight that alerts passers-by to
the moving truck. Because with all the sirens, the ham-
The biggest sales market for the Moroccan-made
mering and the hissing of compressed air on the shop-
Dacias is Renault’s domestic French market, followed
floor, it gets so loud that many drivers have deactivated
by Spain. From the seaside promenade in Tangier,
the reverse warning sound on their trucks.
Spain’s coast looks close enough to touch, being only
14 kilometres away. Tangier’s geographical position
And out the back in the ‘shop’, as the materials store is
was another reason Renault chose the site. It only
otherwise known, the nimble Fenwicks weave in and
takes a day and a half to ship the vehicles to France
out of the aisles. Abdelmounim el-Tounani is one of
from Tangier’s state-of-the-art container port, Tan-
the drivers. “I really appreciate the different ways you
ger-Med. Renault, who invested one billion euro in the
can handle materials, with the telescopic forklifts for
facility, also benefits from the location in other ways,
instance,” says the 27-year-old, who worked in a café in
such as the lower labour costs in Morocco.
Tangier before joining Renault. The ultra-modern fac-
tory, which currently produces some 800 cars each
The factory, which has created a further 30,000 or so
day, is a world away from the hustle and bustle of the
indirect jobs, is a crown jewel of sorts for the newly
old town with its 700,000 residents, its little shops and
industrialising country. It’s no wonder then that King
its street hawkers haggling over every last dirham.
Mohammed VI himself came along for the factory’s
Nevertheless, many employees still make time for their
remembers the monarch’s appearance as if it were
prayers while at work in the factory, which has been
yesterday. “I’d seen His Majesty open many factories
built on a greenfield site roughly 30 kilometres outside
before, but he looked especially happy to be opening
Tangier. A space next to the staff room has been sepa-
ours that day,” he recalls.
opening in February 2012. Mohammed el-Bakrimi
rated off and laid with carpet, where workers can go for
worship. Prayer times are determined by the production
process rather than the muezzin. “Allah will forgive me
for missing the hours of prayer because I’m at work, I
just pray later on instead,” says el-Bakrimi.
He is proud of Renault Tanger’s pioneering green cre-
dentials. The factory’s operations produce virtually no
Watch the video online:
reports.kiongroup.com/motivated
TO OUR SHAREHOLDERS
Contents
21
To our Shareholders
22
24
26
36
41
LETTER TO SHAREHOLDERS
EXECUTIVE BOARD
REPORT OF THE SUPERVISORY BOARD
KION SHARES
SERVICES FOR SHAREHOLDERS
KION GROUP AG | Annual Report 2014
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» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
GORDON RISKE
Chief Executive Officer
We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Letter to shareholders
23
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» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
GORDON RISKE
Chief Executive Officer
FOTO
20150303_Kion_GB2014_EB.indd 18-19
03.03.15 17:52
KION GROUP AG | Annual Report 2014
KION GROUP AG | Annual Report 2014
KION GROUP AG | Annual Report 2014
We keep the world moving.
Jan 01 2015casablancaItalydce2014201515Jan 2015Jan 01 2015Italydce2014201515Jan 2015casablanca2015
KION Group key figures for 2014
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
GORDON RISKE
Chief Executive Officer
1. Order intake
2. Revenue
3. Adjusted EBIT *
4. Total R&D spending
5. Net income (loss)
6. Employees
7. Free cash flow**
* Adjusted for KION acquisition items and one-off items
** Free cash flow is defined as Cash flow from operating activities plus Cash flow
used in investing activities.
Jan 01 2015casablancaItalydce2014201515Jan 2015We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Letter to shareholders
301
KION Group key figures for 2014
Letter to shareholders
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
FOTO
GORDON RISKE
Chief Executive Officer
1. Order intake
2. Revenue
3. Adjusted EBIT *
4. Total R&D spending
5. Net income (loss)
6. Employees
7. Free cash flow**
Dear shareholders, customers, partners, employees
and friends of the KION Group,
For us, 2014 was a year that flew by – and I mean that literally.
We travelled all over the world in order to advance our KION
Group Strategy 2020. But as different as the market require-
ments in each region and country may be, our objective is
always the same: to give our customers the best possible sup-
port so that they can achieve their goals and do business suc-
cessfully. We can only truly be satisfied once our products and
services offer them the utmost added value.
The objectives that we have set ourselves with the Strategy
2020 are ambitious. They focus on growth, profitability, capital
efficiency and resilience. We want to remain highly profitable –
even in the event of any future crises – and further conso-
lidate our position as the most profitable supplier in our indus-
try. In the medium term, we are aiming for EBIT margins of
above 10 per cent.
* Adjusted for KION acquisition items and one-off items
** Free cash flow is defined as Cash flow from operating activities plus Cash flow
used in investing activities.
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KION GROUP AG | Annual Report 2014
We keep the world moving.
Jan 01 2015casablancaItalydce2014201515Jan 2015Jan 01 2015Italydce2014201515Jan 2015casablanca2015
Letter to shareholders
2014: a record year
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
administrative expenses.
We continued to make good progress along this route in 2014, set-
ting records with all of our major key performance indicators. Our
adjusted EBIT improved by 6.3 per cent year on year to reach
€442.9 million. The EBIT margin stood at 9.5 per cent, compared
with 9.3 per cent in 2013. And we have started the new year
with a substantial order book worth €787.2 million. So that we
can continue to increase our profitability, we want to generate
further dynamic growth, contain our fixed costs and reduce
Our orders for new trucks advanced at a faster pace than overall
GORDON RISKE
Chief Executive Officer
market growth. In 2014, global demand for industrial trucks went
up by 7.8 per cent to 1.1 million units. The KION Group’s new
truck business expanded at an even healthier rate. We received
orders for 155,000 new forklift trucks and warehouse trucks,
which equates to a rise of 8.5 per cent compared with 2013. Our
order intake increased in value by 8.6 per cent to €4.877 billion.
O
02
k
o
e
o
b
r
d
r
€ 7 8 7 . 2 m i l l i o n
Jan 01 2015casablancaItalydce2014201515Jan 2015We keep the world moving.KION GROUP AG | Annual Report 2014
TO OUR SHAREHOLDERS
Letter to shareholders
23
Letter to shareholders
Letter to shareholders
» Following the
most successful
2014: a record year
year in its history,
KION has set
itself new and
ambitious
administrative expenses.
We also made further improvements to our funding structure. In
We continued to make good progress along this route in 2014, set-
spring 2014, we repaid corporate bonds with a total volume of
ting records with all of our major key performance indicators. Our
€525 million. This will lower our interest payments – by more than
adjusted EBIT improved by 6.3 per cent year on year to reach
€20 million per year – and give us greater flexibility as we forge
€442.9 million. The EBIT margin stood at 9.5 per cent, compared
ahead with our growth strategy.
with 9.3 per cent in 2013. And we have started the new year
with a substantial order book worth €787.2 million. So that we
Following the KION Group’s record year, conditions are
can continue to increase our profitability, we want to generate
therefore ideal for achieving our objectives going forward.
further dynamic growth, contain our fixed costs and reduce
Streamlined management structures for faster
decision-making
Our orders for new trucks advanced at a faster pace than overall
We streamlined the Group’s management structure at the start of
market growth. In 2014, global demand for industrial trucks went
this year. This means we can make decisions more quickly and
up by 7.8 per cent to 1.1 million units. The KION Group’s new
more effectively. We are creating additional synergies between
truck business expanded at an even healthier rate. We received
our brand companies and putting even greater effort into driving
orders for 155,000 new forklift trucks and warehouse trucks,
our innovations forward, yet still delivering our customary high
which equates to a rise of 8.5 per cent compared with 2013. Our
level of quality. We are working to make our activities even more
order intake increased in value by 8.6 per cent to €4.877 billion.
customer-centric than at present. Our aim is to transfer the mar-
ket feedback from our sales teams and the ideas of our employ-
ees into product innovations and improvements with greater
efficiency and speed.
FOTO
targets.«
GORDON RISKE
Chief Executive Officer
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Order
+8.6 per cent
intake (in €)
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03
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KION GROUP AG | Annual Report 2014
We keep the world moving.
Jan 01 2015casablancaItalydce2014201515Jan 2015Jan 01 2015Italydce2014201515Jan 2015casablanca2015
Letter to shareholders
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
The KION Group is more than the sum of its individual brands.
This added value benefits not only our customers, but also our
shareholders, partners and employees. This is precisely where
this Company’s potential lies – in leveraging cross-brand syner-
gies even more intensively than we do at present. We are con-
tinuing with our successful multi-brand strategy. At the same
time, shared modules and platforms are helping us to reduce
costs and bring new products to market more quickly.
The platforms are developed for fast-growing markets,
primarily at the KION Group’s Chinese research and develop-
ment centre. In Europe, the focus is on shared, cross-brand
GORDON RISKE
Chief Executive Officer
modules. The R&D teams in Europe and the growth markets
are sharing knowledge and information extensively. Last year,
we launched more than 20 new trucks and truck families.
04
Jan 01 2015casablancaItalydce2014201515Jan 2015We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Letter to shareholders
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
Letter to shareholders
Letter to shareholders
The KION Group is more than the sum of its individual brands.
Successful initiatives in North America
This added value benefits not only our customers, but also our
The platform strategy is one of the reasons for the strong position
shareholders, partners and employees. This is precisely where
that the KION Group has held in the South American market for
this Company’s potential lies – in leveraging cross-brand syner-
many years. But another excellent example of where and how we
gies even more intensively than we do at present. We are con-
are deploying this strategy is North America, a vast market in
tinuing with our successful multi-brand strategy. At the same
which we want to establish a far stronger foothold as one of the
time, shared modules and platforms are helping us to reduce
world’s two largest suppliers of forklift trucks, warehouse technol-
costs and bring new products to market more quickly.
ogy and associated services. In order to increase market share in
the USA, Canada and Mexico, we are adapting our product portfo-
The platforms are developed for fast-growing markets,
lio to local market requirements and offering new services.
primarily at the KION Group’s Chinese research and develop-
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GORDON RISKE
Chief Executive Officer
ment centre. In Europe, the focus is on shared, cross-brand
The existing Linde plant in the US state of South Carolina was
modules. The R&D teams in Europe and the growth markets
renamed KION North America in 2014 and now manufactures
are sharing knowledge and information extensively. Last year,
products for various KION brands. Our initiatives are already
we launched more than 20 new trucks and truck families.
delivering results: whereas the North American market as a whole
expanded by over 9 per cent to 219,500 units, KION North Amer-
ica boosted its order intake in units by 23 per cent.
t a k e 2014
order i n
r
e
p
kion nor t
t
n
c e
h americ
a
05
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03.03.15 17:52
KION GROUP AG | Annual Report 2014
We keep the world moving.
Jan 01 2015casablancaItalydce2014201515Jan 2015Jan 01 2015Italydce2014201515Jan 2015casablanca2015
Letter to shareholders
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
Just like the Summerville plant, our new factory in the Czech
Republic is to build trucks for multiple brands under one roof.
Following the ground-breaking ceremony in November 2014,
production at our Stříbro plant near Plzeň is scheduled to begin in
2016 and the KION Group is investing around €12 million in set-
ting it up. The aim is to be able to supply the markets of eastern and
southern Europe even more efficiently, in line with one of the
KION Strategy 2020 objectives of manufacturing trucks as near
At the same time we are consolidating our leading position in
our home market of western Europe. To further increase their
as possible to the customers who will buy them.
GORDON RISKE
Chief Executive Officer
competitiveness, we will invest roughly €60 million by 2021 at
Linde Material Handling’s core plant in Aschaffenburg and
around €23 million at the core STILL plant in Hamburg over
the same period.
06
Jan 01 2015casablancaItalydce2014201515Jan 201511/11/2014Ground-breaking ceremony KIONStříbro plant near Pilsen/Czech RepublicWe keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Letter to shareholders
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
Letter to shareholders
Letter to shareholders
Just like the Summerville plant, our new factory in the Czech
This will create capacity for more growth in the medium term.
Republic is to build trucks for multiple brands under one roof.
The Linde MH and STILL plants in Aschaffenburg and Ham-
Following the ground-breaking ceremony in November 2014,
burg are the centres of excellence for their flagship IC trucks,
production at our Stříbro plant near Plzeň is scheduled to begin in
electric trucks and reach trucks in the premium segment.
2016 and the KION Group is investing around €12 million in set-
ting it up. The aim is to be able to supply the markets of eastern and
Consolidation of market position in China
southern Europe even more efficiently, in line with one of the
We of course have our sights firmly fixed on the incredibly impor-
KION Strategy 2020 objectives of manufacturing trucks as near
tant emerging markets of Asia. With our new truck orders up by
as possible to the customers who will buy them.
around 13 per cent in China last year, we out performed the
world’s largest single market. This enabled us to cement our
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FOTO
At the same time we are consolidating our leading position in
position as a major international supplier and the number three
our home market of western Europe. To further increase their
overall in the Chinese market. One of the driving forces is Baoli,
competitiveness, we will invest roughly €60 million by 2021 at
our third global brand company after Linde and STILL. Serving the
Linde Material Handling’s core plant in Aschaffenburg and
Chinese economy segment, the brand has a great deal of poten-
around €23 million at the core STILL plant in Hamburg over
tial. It also supplies platforms for robust yet affordable trucks
GORDON RISKE
Chief Executive Officer
the same period.
across the Group.
s
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€ 8 3 M i l
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r m a
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03.03.15 17:52
KION GROUP AG | Annual Report 2014
We keep the world moving.
Jan 01 2015casablancaItalydce2014201515Jan 2015Jan 01 2015Italydce2014201515Jan 2015casablanca2015
Letter to shareholders
India is another example. This emerging market offers huge
long-term opportunities for our growth and thus for the imple-
mentation of our KION Group Strategy 2020. Voltas Material
Handling, one of the country’s two leading providers of forklift
trucks and warehouse technology, now operates as KION India.
This name change symbolises its membership of the KION
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
Group family.
Around the globe, there are now 1.2 million trucks from the
KION brands in operation for our customers. That is why the
KION Group’s service business has continued to grow, contribut-
ing more than 45 per cent of the KION Group’s revenue in 2014.
GORDON RISKE
Chief Executive Officer
Our customers rely on our trucks and on their availability. Our
service portfolio is therefore far more than a core element of our
integrated business model, and the excellent results for 2014
are further proof of its effectiveness. At the same time, our ser-
vice offering represents a major selling point for our new trucks.
08
Jan 01 2015casablancaItalydce2014201515Jan 2015We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Letter to shareholders
Letter to shareholders
Letter to shareholders
» Following the
most successful
year in its history,
KION has set
itself new and
Group family.
ambitious
targets.«
India is another example. This emerging market offers huge
Strong demand for employee shares
long-term opportunities for our growth and thus for the imple-
The popularity of our employee equity programme shows that it
mentation of our KION Group Strategy 2020. Voltas Material
is not just my fellow Executive Board members and I who firmly
Handling, one of the country’s two leading providers of forklift
believe in the KION Group’s strategy for success and its potential:
trucks and warehouse technology, now operates as KION India.
our employees are convinced of it too. The programme was
This name change symbolises its membership of the KION
launched initially in Germany last year and is to be extended to
other countries this year. We are making it possible for the KION
Group’s employees to share in their Company’s success to a
Around the globe, there are now 1.2 million trucks from the
greater extent than they do at present. Almost a quarter of the
KION brands in operation for our customers. That is why the
employees who were eligible to take part took up this chance
KION Group’s service business has continued to grow, contribut-
to acquire shares – and more than half of those opted for the
ing more than 45 per cent of the KION Group’s revenue in 2014.
maximum of 60 shares.
GORDON RISKE
Chief Executive Officer
Our customers rely on our trucks and on their availability. Our
service portfolio is therefore far more than a core element of our
integrated business model, and the excellent results for 2014
are further proof of its effectiveness. At the same time, our ser-
vice offering represents a major selling point for our new trucks.
FOTO
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09
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KION GROUP AG | Annual Report 2014
We keep the world moving.
Jan 01 2015casablancaItalydce2014201515Jan 2015Jan 01 2015Italydce2014201515Jan 2015casablanca2015
Letter to shareholders
This high level of participation is an indication of the confidence
that they have in our growth strategy. After all, our employees are
the people who can best judge the potential that the KION Group
holds. I would like to sincerely thank them for their hard work,
their ideas and their loyalty. They are the face of the Group and
enable it to be successful. And they are the central pillar of our
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
Company.
Besides those in our workforce, we also welcomed many new share-
holders from outside the KION Group. Since being included in the
MDAX in September 2014, our shares have become even more visi-
ble and tradable. Following sales of shares by Goldman Sachs and
GORDON RISKE
Chief Executive Officer
KKR, the proportion of shares that can be publicly traded on the
stock exchange is now more than 50 per cent. Our shareholders
form the second pillar, providing the strength for us to continue
along our path of profitable growth and achieve the objectives in
our KION Group Strategy 2020.
10
Jan 01 2015casablancaItalydce2014201515Jan 2015We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Letter to shareholders
» Following the
most successful
year in its history,
KION has set
itself new and
Company.
ambitious
targets.«
Letter to shareholders
Letter to shareholders
This high level of participation is an indication of the confidence
Our customers – whose importance we highlighted at the
that they have in our growth strategy. After all, our employees are
start – of course form the third pillar. In the front part of this
the people who can best judge the potential that the KION Group
annual report, we describe how our products offer customers
holds. I would like to sincerely thank them for their hard work,
genuine added value and explain what they can and should
their ideas and their loyalty. They are the face of the Group and
expect from our trucks and services. We are there to help
enable it to be successful. And they are the central pillar of our
our customers achieve their goals. In every industry, in every
region and around the clock:
FOTO
GORDON RISKE
Chief Executive Officer
Besides those in our workforce, we also welcomed many new share-
We keep the world moving.
holders from outside the KION Group. Since being included in the
MDAX in September 2014, our shares have become even more visi-
With best wishes,
ble and tradable. Following sales of shares by Goldman Sachs and
KKR, the proportion of shares that can be publicly traded on the
stock exchange is now more than 50 per cent. Our shareholders
form the second pillar, providing the strength for us to continue
Gordon Riske
along our path of profitable growth and achieve the objectives in
Chief Executive Officer
our KION Group Strategy 2020.
KION GROUP AG
1 9 M a r 2 0 1 5
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11
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KION GROUP AG | Annual Report 2014
We keep the world moving.
Jan 01 2015casablancaItalydce2014201515Jan 2015Jan 01 2015Italydce2014201515Jan 2015casablanca2015
Letter to shareholders
» Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
SUMMERVILLE
GORDON RISKE
Chief Executive Officer
CHÂTELLER AULT
around 1,300
sales and/or service outlets
worldwide
INDAIATUBA / SÃO PAULO
New trucks material handling
market worldwide 2014
New trucks KION Group brand
companies worldwide 2014
12
Jan 01 2015casablancaItalydce2014201515Jan 2015We keep the world moving.KION GROUP AG | Annual Report 2014 » Following the
most successful
year in its history,
KION has set
itself new and
ambitious
targets.«
FOTO
GORDON RISKE
Chief Executive Officer
Letter to shareholders
Letter to shareholders
K AHL
ASCHAFFENBURG
WEILBACH
HAMBURG
ČESK Ý KRUMLOV
GEISA
CHÂTELLER AULT
REUTLINGEN
around 1,300
sales and/or service outlets
worldwide
LUZZ AR A
PUNE
JINGJIANG
XIAMEN
> 13,000
service engineers worldwide
New trucks KION Group brand
companies worldwide 2014
KION Group trucks in use
worldwide
Share of service business in total
revenue of the KION Group
13
2
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KION GROUP AG | Annual Report 2014
We keep the world moving.
Jan 01 2015casablancaItalydce2014201515Jan 2015Jan 01 2015Italydce2014201515Jan 2015casablanca2015
24
Executive Board
GORDON RISKE
Chief Executive Officer (CEO)
of KION GROUP AG
born in 1957 in Detroit (USA)
DR THOMAS TOEPFER
Chief Financial Officer (CFO) and Labour
Relations Director of KION GROUP AG
born in 1972 in Hamburg
CHING PONG QUEK
Member of the Executive Board
of KION GROUP AG
Chief Asia Pacific Officer
born in 1967 in Batu Pahat/Johor
(Malaysia)
» We have a clear focus
on growth, profitability,
capital efficiency and
resilience.«
DR THOMAS TOEPFER
Chief Financial Officer
We keep the world moving.
» The KION Group is more than
the sum of its brand companies –
this added value benefits our
customers, partners, employees
and shareholders.«
GORDON RISKE
Chief Executive Officer
TO OUR SHAREHOLDERS
Executive Board
25
» We are setting our sights on
fast-growing markets such as Asia
and North America in order to con-
tinue increasing our market share.«
CHING PONG QUEK
Chief Asia Pacific Officer
We keep the world moving. 26
Report of the Supervisory Board of
KION GROUP AG
Dear shareholders,
KION GROUP AG can look back on a successful 2014. It was the first full financial
year following the Company’s initial public offering (IPO) in June 2013 and was
dominated by the first concrete steps in implementing the Strategy 2020, which the
Executive Board and Supervisory Board had adopted at the end of 2013. Business
picked up strongly where the previous year left off, maintaining the same high level
of momentum.
Last year, the Supervisory Board continued to fulfil the tasks and responsibilities
imposed on it by the law, the Company’s articles of incorporation and the German
Corporate Governance Code with dedication and great diligence. There were
again many important decisions, transactions requiring approval and other matters
to be discussed and resolved upon.
Monitoring and advisory role in dialogue with the Executive Board
The Supervisory Board advised the Executive Board on all significant matters relat-
ing to managing the Company and monitored the Executive Board’s running of the
Company. The Supervisory Board was fully involved in all major decisions affecting
the Company from an early stage.
At meetings of the full Supervisory Board, the performance of the business and deci-
sions and transactions that were important for the Company were deliberated on and
discussed extensively on the basis of the information provided to the Supervisory Board
by the Executive Board. The Executive Board always notified the Supervisory Board
of every significant aspect of these transactions promptly and in detail, providing both
written and oral reports. The Supervisory Board satisfied itself at all times that the
Company was being managed lawfully and diligently.
The Executive Board gave the Supervisory Board sufficient notice of transactions
that, according to the law, the Company’s articles of incorporation or the rules of
procedure for the Executive Board of KION GROUP AG, require the Supervisory
Board’s consent and presented them in good time for resolutions to be adopted.
The Supervisory Board examined closely the resolutions proposed by the Executive
Board and deliberated on them before adopting them. In urgent cases, written
resolutions were also adopted.
We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Report of the Supervisory Board
27
DR JOHN FELDMANN
Chairman
The Executive Board informed the Supervisory Board about key financial data at reg-
ular intervals. Where there was a discrepancy between the actual figures and the
business planning, the Executive Board always provided the Supervisory Board with
a detailed oral and written explanation of what it considered the main reasons for
the discrepancy. This enabled the Executive Board and Supervisory Board to discuss
the reasons in detail and, if necessary, to take effective countermeasures.
In the periods between meetings of the Supervisory Board and between those of its
committees, the chairman of the Supervisory Board, who is also chairman of the
Executive Committee, remained in close contact at all times with the Chief Executive
Officer. This ensured that the Super visory Board was always kept up to date on the
Company’s performance and any significant transactions.
Main focus areas discussed by the Supervisory Board
Of particular importance in the Supervisory Board’s deliberations in the first half of
2014 were the first concrete steps in implementing the Strategy 2020, which had been
developed and adopted in 2013 and aggregates the Executive Board’s plans for the
Company’s further strategic development, as well as the preparations for the Company’s
We keep the world moving.
KION GROUP AG | Annual Report 2014 28
first Annual General Meeting since the IPO. In the second half of the year, the Super-
visory Board closely followed the discussion about appropriate restructuring meas-
ures at Linde Hydraulics GmbH & Co. KG, in which the Company still holds a minority
interest, and the decision on necessary contributions from the Company. Delibera-
tions also focused on the Company’s ongoing business performance and financial
position, planning of capital expenditure, the employment situation, risk management,
individual aspects of corporate strategy and planning, corporate governance matters
and, in particular, the areas of responsibility assigned to the Supervisory Board – such
as Executive Board remuneration.
The main personnel matter, which the Supervisory Board had to deal with at the end
of last year, were the changes made to the membership of the Executive Board at
the start of this year. With effect from 15 January 2015, Executive Board members
Theodor Maurer and Bert-Jan Knoef stepped down from the Executive Board and
resigned from their roles as the CEOs of Linde Material Handling GmbH and STILL
GmbH respectively at their own request. The departure of the two Executive Board
members and the resulting organisational issues were discussed extensively by the
Supervisory Board. As part of measures to improve the efficiency and effectiveness
of KION GROUP AG, the Company’s Chief Executive Officer, Mr Gordon Riske, has
taken over Mr Maurer’s and Mr Knoef’s functions in addition to his other management
responsibilities. The Supervisory Board thanks Mr Maurer and Mr Knoef for their hard
work and the outstanding contributions that they have made over the years to KION
GROUP AG’s successful development and wishes them both all the best and every
success in their new endeavours.
In 2014, the Supervisory Board and its committees dealt with these issues and made
the necessary decisions at a total of 18 meetings (seven full Supervisory Board meet-
ings and eleven committee meetings). Some of the meetings were held in the form
of conference calls. There were also several informal conference calls for the purpose
of providing the members of the Supervisory Board or the relevant committees with
advance information.
KION Strategy 2020
A key area covered by the Supervisory Board’s deliberations in 2014 had been the
plans to implement the Strategy 2020, particularly the expansion of production at
Linde Material Handling GmbH in Aschaffenburg and the accompanying relocation of
reach truck production from Aschaffenburg to a new production facility in Střibro in
the Czech Republic. The Supervisory Board approved this measure at its meeting on
20 March 2014. The Strategy 2020 was also discussed at the Supervisory Board
meeting on 2 June 2014, at which the Executive Board delivered a progress report on
the implementation of the measure, and at the Supervisory Board’s strategy meeting
We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Report of the Supervisory Board
29
on 23 September 2014, when the focus was on opportunities and the product strategy
in emerging markets. Last year, the Supervisory Board again followed the Executive
Board’s considerations relating to the Strategy 2020 with great interest and provided
constructive support.
Corporate governance and comply-or-explain statement
The regular reports by the Executive Board and some of the Company’s managers on
corporate governance matters were a further important subject area discussed by
the Supervisory Board and its committees. As part of its monitoring duties in this
area required by stock company law, the Supervisory Board itself ensured that it was
informed about corporate governance matters by means of appropriate reports
covering the internal control system, risk management, internal auditing and com-
pliance within the Group, in addition to its Audit Committee dealing with these matters
on a regular basis. The focus was on the processes in place as well as on the content
of the individual reports. As a result of these reviews, the Supervisory Board was
able to gain an impression of the processes in place and to examine and comment
on the proposed developments in these areas.
Owing to the changes to the membership of the Supervisory Board during the year,
it was decided to postpone the review of the size and effectiveness of the Super-
visory Board and its committees until 2015. The review, which had been planned for
2014, will now be combined with a formal efficiency review.
In accordance with section 3.10 of the German Corporate Governance Code, the
Executive Board and the Supervisory Board provide a detailed report on corporate
governance in the KION Group in the corporate governance report. This is combined
with the declaration on corporate governance pursuant to section 289a of the German
Commercial Code (HGB) and can be found on pages 44 to 57 of the annual report.
The report is also available on the KION GROUP AG website at kiongroup.com/
GovernanceReport. For details of the remuneration paid to the Executive Board and
the Supervisory Board for 2014, please refer to the remuneration report, which can
be found on pages 58 to 69 of the annual report.
At its meeting on 17 December 2014, the Supervisory Board thoroughly discussed
the KION Group’s compliance with the recommendations of the current version of
the German Corporate Governance Code. The Supervisory Board keeps a close
eye on changes to the Code and to governance standards at international level. The
Executive Board and Supervisory Board submitted an updated comply-or-explain
statement pursuant to section 161 of the German Stock Corporation Act (AktG) on
19 December 2014. It has been made permanently available to the public on the
KION GROUP AG website. KION GROUP AG complied with all but one of the re -
We keep the world moving.
KION GROUP AG | Annual Report 2014 30
commendations in the German Corporate Governance Code (version dated
24 June 2014) and intends to continue to do so in future. As was the case in the
previous year, the only recommendation of the Code with which KION GROUP AG
does not comply is the recommendation in section 3.8 (3) of the Code for an
excess in the D&O insurance policies for members of the Supervisory Board. KION
GROUP AG’s articles of incorporation do not provide for this type of excess. The
Company believes that such an excess is not typical at international level and would
therefore make it considerably more difficult to find independent candidates, in par-
ticular candidates from outside Germany.
Work of the committees
KION GROUP AG’s Supervisory Board had four committees last year: the Mediation
Committee pursuant to section 27 (3) of the German Codetermination Act (MitbestG),
the Executive Committee, the Audit Committee and the Nomination Committee.
These committees, but primarily the Executive Committee, prepare the matters to
be discussed at the meetings of the full Supervisory Board. In individual cases, the
Supervisory Board’s decision-making powers were delegated to committees within
the scope permitted by law. The chairman of the Supervisory Board is also chairman
of all committees except the Audit Committee. At the meetings of the full Super visory
Board, the committee chairmen report in detail on the discussions of the committees
to ensure that the Supervisory Board as a whole is always fully informed.
The Executive Committee consists of four shareholder representatives and four
employee representatives. It prepares the meetings of the Supervisory Board and is
responsible for ongoing matters between Supervisory Board meetings. The Execu-
tive Committee also prepares the Supervisory Board’s decisions relating to corpo-
rate governance, particularly amendments to the comply-or-explain statement pur-
suant to section 161 AktG reflecting changed circumstances and the checking of
adherence to the comply-or-explain statement. It also prepares documents for the
Supervisory Board when Executive Board members are to be appointed or removed
and, if applicable, when a new Chief Executive Officer is to be appointed. Documents
relating to any matters in connection with Executive Board remuneration are also
prepared by the Executive Committee. The Executive Committee is also responsible
for resolutions concerning the conclusion, amendment and termination of Executive
Board employment contracts and agreements with Executive Board members
governing pensions, severance packages, consultancy and other matters and for
resolutions about any matters arising as a result of such contracts and agreements,
unless they relate to remuneration. The responsibilities of the Executive Committee
also include resolutions about the extension of loans to Executive Board members
and parties related to them and to Supervisory Board members and parties related
to them as well as resolutions to approve contracts with Supervisory Board mem-
We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Report of the Supervisory Board
31
bers outside their Supervisory Board remit. The Executive Committee should – in
consultation with the Executive Board – regularly deliberate on long-term succession
planning for the Executive Board.
In 2014, the Executive Committee consisted of Dr John Feldmann (chairman),
Dr Alexander Dibelius, Mr Joachim Hartig, Mr Denis Heljic, Mr Johannes P. Huth,
Mr Thilo Kämmerer (until 31 August 2014), Mr Jiang Kui, Mr Olaf Kunz (from 24 Septem-
ber 2014) and Mr Kay Pietsch. The Executive Committee met four times in 2014. The
main topics discussed by the Executive Committee in 2014 were those concerning the
Company’s first Annual General Meeting and the KION Strategy 2020. It also scruti-
nised the personnel changes on the Executive Board.
The Mediation Committee comprises the chairman of the Supervisory Board, his dep-
uty, an employee representative and a shareholder representative. If the majority
required by section 27 (3) and section 31 (3) MitbestG is not reached in a vote by the
Supervisory Board on the appointment of an Executive Board member, the Mediation
Committee must propose candidates for the post to the Supervisory Board within a
month. The chairman of the Supervisory Board does not have a second vote on the
candidates proposed.
In 2014, the Mediation Committee consisted of Dr John Feldmann (chairman), Mr Joachim
Hartig, Mr Johannes P. Huth and Mr Kay Pietsch. The Mediation Committee did not
need to be convened in 2014.
The Audit Committee comprises four members. Its purpose is to assist the Supervisory
Board in performing its task of monitoring accounting processes, compliance matters
and reporting. These responsibilities encompass monitoring the quality and integrity
of the consolidated and separate financial statements (as well as related disclosures),
the internal control mechanisms, risk management and the internal audit system. The
Audit Committee also reviews the other work carried out by the independent auditors
in connection with the audit and checks that the independent auditors are qualified
and independent. It is also responsible for engaging the independent auditors, deter-
mining the focus of the audit and agreeing the fee. In addition, the Audit Committee
exercises the rights in investee companies set forth in section 32 (1) MitbestG.
In 2014, the Audit Committee consisted of Mr Hans Peter Ring (chairman), Dr John
Feldmann, Mr Kay Pietsch and Ms Alexandra Schädler. Mr Hans Peter Ring is an inde-
pendent financial expert within the meaning of sections 100 (5) and 107 (4) AktG. The
Audit Committee met five times in 2014. The main topics discussed by the Audit Com-
mittee in 2014 were the 2014 annual financial statements, the interim reports, the budget
and the regular subject of the key elements of corporate governance within the Company.
We keep the world moving.
KION GROUP AG | Annual Report 2014 32
The Nomination Committee comprises four members, all of whom are shareholder
representatives. The Nomination Committee’s only task is to propose candidates for
the Supervisory Board to the Supervisory Board for proposal to the Company’s
Annual General Meeting when Supervisory Board elections are due.
In 2014, the Nomination Committee consisted of Dr John Feldmann (chairman),
Dr Martin Hintze, Mr Jiang Kui and Ms Silke Scheiber. The Nomination Committee met
twice in 2014. At these meetings, it concentrated on selecting suitable candidates
to replace the departing members of the Supervisory Board. This culminated in the
proposal of Ms Xu Ping and Ms Behrendt as new Supervisory Board members with
effect from 1 January 2015.
All members of the Supervisory Board attended the Supervisory Board meetings in
2014 apart from the following exceptions: at one meeting, five members sent their
apologies, at two meetings, three members sent their apologies, at two meetings,
one member sent apologies and at one meeting, two members sent their apologies.
With the exception of two committee meetings at each of which one member sent
apologies, all committee meetings were attended by all members of the respective
committee. Supervisory Board member Tan Xuguang participated in fewer than half
of all Supervisory Board meetings.
Engagement of the auditors; audit of the separate and consolidated
financial statements
The Company’s independent auditors, Deloitte & Touche GmbH Wirtschaftsprüfungs-
gesellschaft, Frankfurt am Main, audited the Company’s separate financial state-
ments and management report and the consolidated financial statements and group
management report for the year ended 31 December 2014. Various meetings were
held between the chairman of the Audit Committee and the auditors in preparation for
the appointment of the auditors. They concerned the suitability and independence of
the auditors and the question of fees. The forthcoming engagement of an auditing
firm was discussed at the Audit Committee meeting on 10 March 2014 and there was
an opportunity to speak to the auditors in person. The key audit issues were dis-
cussed and set out accordingly at the Audit Committee’s meeting on 10 March 2014.
The auditors were appointed by the chairman of the Supervisory Board on
20 November 2014.
The auditors issued an unqualified opinion for the separate financial statements,
including the management report, for the year ended 31 December 2014 and the
consolidated financial statements, including the group management report, for the
year ended 31 December 2014 on 10 March 2015.
We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Report of the Supervisory Board
33
In order to inform the Supervisory Board and its Audit Committee as soon as possi-
ble about the progress of the audit and the individual audit findings that were emerg-
ing, the members of both committees were offered two telephone briefings in which
the Executive Board and the auditors took part. The auditors submitted their report
and the documents relating to the financial statements to the members of the Audit
Committee on 2 March 2015 and to the members of the Supervisory Board on
10 March 2015. The report was discussed in depth at the Audit Committee meeting
on 10 March 2015 and at the full Supervisory Board meeting on 18 March 2015, both
of which were attended by the auditors. At both of those meetings, the auditors
reported in detail on the main findings of the audit and provided comprehensive answers
to all questions asked by members of the Audit Committee and Supervisory Board.
Having itself scrutinised the Company’s separate financial statements, consolidated
financial statements, management report and group management report for the year
ended 31 December 2014, the Audit Committee then made one recommendation to
the full Supervisory Board, which the chairman of the Audit Committee explained in
more detail in his report to the meeting of the full Supervisory Board. On this basis,
following further discussion of its own, the Supervisory Board approved the results of
the independent audit at its meeting on 18 March 2015. Based on the final outcome
of the Supervisory Board’s own review, no objections were raised. The Supervisory
Board approved the Company’s separate financial statements and consolidated finan-
cial statements for the year ended 31 December 2014 prepared by the Executive
Board. The annual financial statements were therefore adopted.
At its meeting on 18 March 2015, the Supervisory Board also discussed and
approved the proposal made by the Executive Board that the distributable profit of
KION GROUP AG be appropriated for the payment of a dividend of €0.55 per no-
par-value share. In doing so, the Supervisory Board took account of the Company’s
financial situation and performance, its medium-term financial and capital-expendi-
ture planning and the interests of the shareholders. The Supervisory Board believes
the proposed dividend is appropriate.
Review of the dependency report
The Supervisory Board also considered the report compiled by the Executive Board
of KION GROUP AG concerning the Company’s relationships with affiliated entities
(dependency report). The Company’s auditors, Deloitte & Touche GmbH Wirtschafts-
prüfungsgesellschaft, Frankfurt am Main, reviewed the dependency report, compiled
an auditors’ report on it and issued the following unqualified opinion based on their
completed audit on 10 March 2015:
We keep the world moving.
KION GROUP AG | Annual Report 2014 34
Auditor’s opinion
Based on our audit and evaluation conducted in accordance with our professional
duties, we hereby confirm that
1. the factual information presented in the report is accurate,
2. the consideration paid by the company in the legal transactions listed in the report
was not inappropriately high,
3. in respect of the transactions listed in the report, there are no circumstances that
would support an assessment materially different from the assessment made by
the Executive Board.
The dependency report and the auditors’ report about it were submitted to all the
members of the Supervisory Board in good time and were discussed in detail in the
presence of the auditors at the Supervisory Board meeting on 18 March 2015. The
auditors reported on the main findings of their audit. The Supervisory Board agreed
with the findings of the audit. Based on the final outcome of its own review, the
Supervisory Board did not raise any objections to the Executive Board’s declaration
at the end of the report concerning relationships with affiliated entities.
Personnel changes
There were no changes on the Executive Board of KION GROUP AG during 2014.
However, there were several changes on the Supervisory Board in 2014. Mr Thilo
Kämmerer stepped down from the Supervisory Board on 31 August 2014. He was
succeeded by Mr Olaf Kunz as an employee representative with effect from 1 Sep-
tember 2014. Ms Silke Scheiber and Dr Martin Hintze stepped down from the
Supervisory Board on 31 December 2014. Ms Xu Ping and Ms Birgit Behrendt were
appointed by the courts as their successors with effect from 1 January 2015. The
Supervisory Board would like to thank Ms Scheiber, Dr Hintze and Mr Kämmerer for
the great dedication with which they have always carried out their work in the inter-
ests of the Company. Both appointments will be submitted for confirmation by the
shareholders at the Annual General Meeting.
We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Report of the Supervisory Board
35
As preparation for their duties as members of the Company’s Supervisory Board, the
new members were offered a comprehensive programme of information on the Com-
pany’s business and on the main governance-related processes put in place by the
Company in relation to risk management, the internal control system, internal auditing
and compliance.
The details of this report were discussed thoroughly at the Supervisory Board meet-
ing on 18 March 2015 when it was adopted.
My colleagues on the Supervisory Board and I would like to thank the members of the
Executive Board and the employees of KION GROUP AG and its Group companies in
Germany and abroad for their commitment and outstanding achievements in 2014.
Dr John Feldmann
Chairman
We keep the world moving.
KION GROUP AG | Annual Report 2014
36
KION shares
Volatile stock market environment
Inclusion in the MDAX
The global equity markets experienced severe volatility in 2014.
On 22 September 2014, KION GROUP AG was promoted from
Although investors were increasingly on the buy side because
the SDAX to the MDAX, which comprises the 50 largest listed
persistently low interest rates provided a strong incentive for
companies in Germany after those in the DAX, making KION
investing in equities, sentiment was depressed, mainly by geo
shares even more attractive and visible
to
investors.
political tensions in the Middle East and Ukraine as well as fears
> TABLE 001
of a renewed economic downturn in western Europe. As a result,
there was a rapid series of sharp price fluctuations in both direc
tions. Despite this high volatility, the DAX – which is regarded as
Basic information on KION shares
TABLE 001
the main barometer for prices in the German stock markets –
closed at virtually the same level as at the end of 2013. Over the
course of the year, the DAX had risen to 9,806 points, a gain of
just 2.7 per cent, while the MDAX was up by 2.2 per cent.
ISIN
WKN
Bloomberg
Reuters
DE000KGX8881
KGX888
KGX.GR
KGX.DE
Respectable performance by KION shares
Share type
Noparvalue shares
Index
MDAX
The price of KION shares also ended 2014 virtually unchanged.
They closed at €31.74 on 31 December 2014, which was
3.3 per cent higher than their 2013 yearend closing price of
€30.73. The shares achieved their highest price of the year on
24 February when they reached €37.07. However, any gains were
At the end of the reporting year, the KION Group’s market capital
lost in the months that followed, in line with the performance of
isation amounted to €3.1 billion, of which €1.5 billion was in free
the market as a whole. The shares’ performance during the year
float. The average daily Xetra trading volume during the year was
was also influenced by three placements of blocks of shares by
106.3 thousand shares or €3.4 million. > TABLE 002
major shareholders KKR and Goldman Sachs (see next page).
KION shares fell to their lowest price of the year, €25.83,
on 15 October before recovering and catching up with the perfor
mance of the MDAX once more. > DIAGRAM 001
We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
KION shares
37
Share price performance between 28 June 2013 and 31 December 2014
DIAGRAM 001
€37
€35
€33
€31
€29
€27
€25
€23
KION GROUP + 33.9%
+ 23.6%
+ 23.2%
MDAX
DAX
€ 31.74 *
* Closing price
€23.70 *
07/2013
08/2013
09/2013 10/2013 11/2013
12/2013 01/2014 02/2014 03/2014 04/2014 05/2014 06/2014 07/2014
08/2014 09/2014 10/2014 11/2014
12/2014
Sharp rise in free float
via Superlift Holding. On 7 January, they sold a total of 10.7 million
shares – 10.8 per cent of KION shares – on the stock exchange,
The shareholder structure changed significantly in the year under
followed by the sale of around 7.5 million more shares – 7.6 per cent
review, with a shift in favour of the free float. At the end of 2013,
of KION shares – on 10 June. KKR and Goldman Sachs disposed
Weichai Power exercised its option to acquire shares from KKR
of a further block of 8.0 million shares – 8.1 per cent of KION
and Goldman Sachs and thereby increase its stake from
shares – on 10 November. As a result of these placements and
30.0 per cent to 33.3 per cent. The transaction was completed on
the increase in Weichai’s stake, the proportion of shares held by
15 January 2014. Weichai Power also undertook not to acquire
KKR and Goldman Sachs indirectly via Superlift Holding at the
more than 49.9 per cent of KION shares before 28 June 2018
end of 2014 stood at 18.8 per cent, compared with 48.6 per cent
(standstill agreement).
at the beginning of the year. Weichai Power is therefore the
Meanwhile, KKR and Goldman Sachs carried out several
biggest single shareholder in KION GROUP AG.
placements that substantially reduced their stakes held indirectly
We keep the world moving.KION GROUP AG | Annual Report 2014
38
Share data
TABLE 002
Closing price on 31/12/2013
High for 2014
Low for 2014
Closing price on 31/12/2014
Market capitalisation as at 31/12/2014
Performance in 2014
€30.73
€37.07
€25.83
€31.74
€3,138.6 million
3.3%
Average daily trading volume in 2014 (no. of shares)
106.3 thousand
Average daily trading volume in 2014 (€)
Share capital
Number of shares as at 31/12/2014
Pro forma earnings per share for 2014
Dividend per share for 2014 *
Dividend payout rate *
Total dividend payout *
Equity ratio as at 31/12/2014
* Proposed dividend for the fiscal year 2014
€3.4 million
€98,900,000
98,900,000
€1.79
€0.55
31%
€54.3 million
26.9%
We keep the world moving.KION GROUP AG | Annual Report 2014
TO OUR SHAREHOLDERS
KION shares
39
Conversely, the free float increased from 20.3 per cent at the
13 June 2013 allowing treasury shares to be acquired for an
beginning of 2014 to a total of 47.7 per cent by the end of the year.
employee share programme. A total of 251,000 shares have been
Since October 2014, the shares in free float have also included
repurchased since August 2013, 51,000 of them in September
those held by around 1,800 employees of the KION Group’s
2014. Of these treasury shares, 163,562 were left after the first
German companies who received blocks of shares at favourable
stage of the KEEP programme – equivalent to 0.2 per cent
terms under the KION Employee Equity Programme (KEEP)
of share capital – and they remain available for the employee
approved by the Executive Board. As a result of the programme,
share scheme.
a total of 87.4 thousand shares – equivalent to 0.1 per cent of
On 28 June 2014, all participants in the KION management
share capital – are now broadly distributed among the workforce.
partnership plan (MPP) also became entitled to sell their shares or
The KEEP programme is to be extended to other countries in 2015.
transfer them into their private investment accounts. The shares
In order to implement the KION Employee Equity Programme,
previously reported as being attributable to KION management
KION GROUP AG made use in September of an authorisation
are therefore now counted as part of the free float. > DIAGRAM 002
granted by a resolution of the Extraordinary General Meeting on
Shareholder structure as at 31 December 2014
DIAGRAM 002
0.2%
KION GROUP AG
18.8%
KKR AND GOLDMAN SACHS ²
33.3%
WEICHAI POWER
47.7%
FREE FLOAT ¹
1 Includes shares that are still held by KION Management Beteiligungs GmbH & Co. KG for members of the Executive Board and Supervisory Board but which are no longer subject to
a lockup period and can therefore be sold or transferred to members’ private investment accounts.
2 Held via Superlift Holding S.à r.l.
We keep the world moving.KION GROUP AG | Annual Report 2014 40
On 12 February 2015, KKR and Goldman Sachs placed a further
4.8 million shares (4.9 per cent of KION shares) in the market. As
a result of this transaction, the free float increased again, from
Overwhelming majority of financial analysts
recommend KION shares
47.7 per cent to 52.6 per cent. The proportion of shares held indi
In 2014, the following six brokerage houses began to cover KION
rectly by KKR and Goldman Sachs via Superlift Holding therefore
Group’s shares: HSBC, Baader Bank, MainFirst, Bankhaus
reduced from 18.8 per cent to 13.9 per cent.
Lampe, LBBW and NordLB. This brings the total number of
Optimised funding structure,
improved rating
brokerage houses that now regularly publish research on KION
shares to 16. At the year end, twelve of the analysts recom
mended KION shares as a buy while four rated them as neutral.
The median target price specified for the shares was €36.00.
On 15 April 2014, the KION Group redeemed two of its outstand
ing bond tranches before maturity in order to further optimise its
Dividend of €0.55 per share planned
corporate funding. The bonds had been issued prior to the IPO.
The fixedrate tranche of the corporate bond issued in 2011,
The Executive Board and Supervisory Board of KION GROUP AG
which had a volume of €325.0 million, and the floatingrate
will propose a dividend of €0.55 per share to the Annual General
tranche of the bond issued in 2013, which had a volume of
Meeting on 12 May 2015. This equates to a dividend payout rate
€200.0 million, were repaid early in full. This was financed by
of about 31 per cent of net income. Proforma earnings per share
drawdowns under the existing revolving credit facility and an
for 2014 came to €1.79.
increase of €198.0 million to the facility. By refinancing these bond
tranches, the KION Group expects to save around €20 million in
annual interest payments.
The fixedrate (6.75 per cent) tranche of the bond issued in
2013, which has a volume of €450.0 million and a maturity date of
2020, remains in place.
On 7 April 2014, Moody’s raised the rating of the KION Group
and the bonds from Ba3 to Ba2 with a stable outlook. Then, on
15 April 2014, S&P raised its rating for the KION Group from BB –
with a positive outlook to BB, still with a positive outlook.
We keep the world moving.KION GROUP AG | Annual Report 2014 TO OUR SHAREHOLDERS
Services for shareholders
41
Services for shareholders
Active investor relations
Each of the KION Group’s financial reports was explained in
detail. The Executive Board of KION GROUP AG had presented
The Executive Board and the KION Group’s investor relations
the key aspects of the KION Group Strategy 2020 during a con
team talked directly with investors and analysts on numerous
ference call on 20 March 2014 when the 2013 annual report was
occasions during the year. As well as attending a total of 15 inves
published, and the strategy was also one of the key themes of the
tor conferences in Germany and abroad, they ran a multitude of
Annual General Meeting. The Executive Board held update calls
roadshows and held a number of oneonone meetings.
to report on each set of quarterly results. The transcripts from the
The KION Group’s first Capital Markets Day for analysts and
quarterly update calls along with the presentations form part of
investors, which was held in Mainz on 2 December, was also a
the extensive information for investors available on the Compa
focal point of investor activities. At the event, the Executive Board
ny’s website at kiongroup.com/ir/presentations.
addressed the key aspects of the KION Group Strategy 2020 that
Data about KION shares and bonds, press releases and
had been announced during the year, explained them in detail
presentations as well as information about the Annual General
and answered questions about the Group’s business model. To
Meeting and corporate governance within the Group can be
provide representatives from the capital markets with an insight
found at kiongroup.com/ir. You can register for the IR newsletter
into KION’s business, various forklift and warehouse trucks were
under IR Contact & Services, which will enable you to receive our
put on display and shown in operation.
press releases and more. The contact details of the IR team and
The first Annual General Meeting held by KION GROUP AG
the financial calendar can also be found here. The KION Group’s
as a listed company took place on 19 May 2014 and was attended
financial reports are available both as PDF files and as interactive
by around 150 shareholders. Those in attendance, representing
online versions. They also contain a download section where, for
90.21 per cent of the voting share capital, approved all the draft
example, you can download all of the tables as an Excel file.
resolutions put forward by the Company’s management with a
large majority, including the resolution to distribute a dividend of
€0.35 per share. The total dividend payout of €34.5 million was
equivalent to a dividend payout rate of roughly 25 per cent of net
income. Other agenda items related to approval of the Executive
Board remuneration system and the creation of authorised and
KION GROUP INVESTOR RELATIONS
conditional capital – equating in total to 10 per cent of the existing
kiongroup.com/ir
share capital – with the option of excluding preemptive rights.
The speeches of the Chief Executive Officer and the chairman of
the Supervisory Board were broadcast live at kiongroup.com/agm.
A webcast of the Chief Executive Officer’s speech is also available
on the Company’s website.
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Contents
43
B
Corporate Governance
44
44
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52
58
58
68
CORPORATE GOVERNANCE REPORT
Declaration
Executive board and supervisory board
shareholdings and directors’ dealings
DISCLOSURES RELEVANT TO ACQUISITIONS
REMUNERATION REPORT
Executive Board remuneration
Supervisory Board remuneration
KION GROUP AG | Annual Report 2014
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Corporate governance report
Corporate governance covers the whole system of managing and
monitoring an enterprise, the principles and guidelines that shape
its business policy and the system of internal and external control
1. Comply-or-explain statement
pursuant to section 161 (1) AktG
and monitoring mechanisms. The Executive Board and Supervi-
Section 161 (1) AktG requires the management board and super-
sory Board of KION GROUP AG believe that an uncompromising
visory board of a publicly listed company to issue an annual dec-
commitment to the most ambitious standards of corporate gov-
laration stating that the company has complied with, or intends to
ernance is essential to the Company’s long-term success. Com-
comply with, the recommendations of the Code and also stating
pliance with these principles also promotes the trust that our
the recommendations with which it has not complied or does not
investors, employees, business partners and the public have in
intend to comply, and the reasons why. Detailed reasons must be
the management and monitoring of the Company.
given for any departure from the recommendations of the Code.
There is a close correlation between the corporate govern-
The comply-or-explain statement must be made permanently
ance report required by section 3.10 of the German Corporate
available to the public on the company’s website.
Governance Code as amended on 24 June 2014 (the Code) and
Following KION GROUP AG’s listing on the Regulated Market
the content of the corporate governance declaration required
at Frankfurt Stock Exchange on 28 June 2013, the Executive
by section 289a German Commercial Code (HGB). For this rea-
Board and Supervisory Board issued the Company’s first com-
son, the Executive Board and the Supervisory Board of KION
ply-or-explain statement on 19 December 2013.
GROUP AG have combined the two statements.
Both decision-making bodies considered the recommenda-
DECLARATION PURSUANT TO
SECTION 289A OF THE GERMAN
COMMERCIAL CODE (HGB)
tions of the amended Code in detail and on 17 December 2014
they issued the second comply-or-explain statement of KION
GROUP AG as required by section 161 (1) AktG as follows:
1. Since the last comply-or-explain statement was issued in
December 2013, KION GROUP AG has complied with all of
the recommendations of the German Corporate Governance
Code (the Code) as amended on 13 May 2013 with one
The corporate governance declaration required by section 289a
exception.
HGB includes the comply-or-explain statement in accordance
In departure from section 3.8 (3) of the Code, the articles
with section 161 of the German Stock Corporation Act (AktG) (see
of incorporation of KION GROUP AG do not provide for an
1. below), relevant disclosures on corporate management prac-
excess in the D&O insurance policies for members of the
tices extending beyond statutory requirements (see 2. below), a
Supervisory Board. The Company believes that such an
description of the working methods of the Executive Board and
excess is not typical at international level and would therefore
the Supervisory Board, and a description of the working methods
make it considerably more difficult to find independent candi-
and composition of the Supervisory Board committees (see 3.
dates, in particular candidates from outside Germany.
below). The declaration on corporate governance pursuant to
section 289a HGB is part of the management report. According
to section 317 (2) sentence 3 HGB, the information provided in
accordance with section 289a HGB does not have to be included
in the audit of financial statements.
We keep the world moving.KION GROUP AG | Annual Report 2014
CORPORATE GOVERNANCE
Corporate governance report
45
2. The Code as amended on 24 June 2014 was announced in the
German Stock Corporation Act. For example, the Supervisory
German Federal Gazette on 30 June 2014. Since then, KION
Board’s Audit Committee, which was set up partly for this pur-
GROUP AG has complied with all of the recommendations in
pose, received regular reports on the accounting processes and
the Code as amended on 24 June 2014 with the one exception
the effectiveness of the internal monitoring and risk management
described above, and intends to continue to do so in future.
systems and of the audit of financial statements, and then
reported back to the full Supervisory Board on these matters.
Wiesbaden, 19 December 2014
2.1 Internal control system
For the Executive Board:
KION GROUP AG has an internal control system designed to
meet the specific needs of the Company. Its processes are
Gordon Riske
Dr Thomas Toepfer
intended to ensure the correctness of the internal and external
For the Supervisory Board:
Dr John Feldmann
accounting processes, the efficiency of the Company’s business
operations and compliance with key legal provisions and internal
policies. These control processes also include the Company’s
strategic planning, where the underlying assumptions and plans
are reviewed on an ongoing basis and refined as necessary.
The Supervisory Board and in particular the Supervisory
Board’s Audit Committee regularly obtain information on the pro-
The comply-or-explain statement is available on the website of
cesses put in place as part of the internal control system and
KION GROUP AG at kiongroup.com/comply_statement
have satisfied themselves as to their efficiency.
2. Relevant disclosures on corporate
governance
2.2 Accounting-related internal control system
For its accounting process, the KION Group has defined suitable
structures and processes as part of its internal control and risk
The corporate governance of KION GROUP AG is essentially, but
management system and implemented them throughout the
not exclusively, determined by the provisions of the German
Group. Besides defined control mechanisms, it includes, for
Stock Corporation Act and those of the Codetermination Act (Mit-
example, system-based and manual reconciliation processes,
bestG) and also follows the recommendations of the German
clear separation of functions, strict compliance with the dou-
Corporate Governance Code. KION GROUP AG complies with all
ble-checking principle and written policies and procedures. The
the Code’s recommendations, with one exception. These funda-
overarching aim is for the separate financial statements, consoli-
mental principles are combined with a commitment to sustainable
dated financial statements, management report and group man-
business, taking account of society’s expectations in the markets
agement report to be fully compliant with the relevant statutory
in which the Company operates.
and regulatory requirements and, in particular, the applicable
In 2014, the Executive Board and the Supervisory Board (or
financial reporting standards. Changes to these requirements
its committees) regularly discussed corporate governance issues
and standards are analysed on an ongoing basis and taken into
in accordance with a rolling schedule of topics. This ensured that
account as appropriate. Details can be found in the risk report,
the key elements of corporate governance within the KION Group
which is part of the group management report.
were always on the agenda at meetings of the Company’s main
decision-making bodies. The Supervisory Board in particular
complied with the supervisory duties incumbent upon it under the
We keep the world moving.KION GROUP AG | Annual Report 2014
46
2.3 Risk management system
within the Group; the compliance department reports to the Chief
Executive Officer of KION Group AG. Responsibility for imple-
For the Company to be managed professionally and responsi-
menting compliance management has been delegated to the
bly, the Executive Board must regularly obtain information about
Chief Compliance Officer, the CEOs of the STILL and LMH seg-
existing risks and whether they have changed from the risk-
ments, and the heads of the KION regions. Responsibility for
management system established in the Company, and then
monitoring of course remains with the CEO of the Group. The
report on this to the Supervisory Board’s Audit Committee. The
KION compliance department, the KION compliance team and
KION Group’s risk-management system is documented in a
the KION compliance committee provide operational support to
Group risk policy that defines tasks, processes and responsibili-
the aforementioned functions. The KION compliance department
ties and sets out the rules for identifying, assessing, reporting and
focuses mainly on preventing compliance violations by providing
managing risk. Specific individual risks are then reported by each
guidance, information, advice and training. It manages the KION
Group entity using an online reporting tool. Reporting on
compliance team, in which local and regional compliance officers
cross-segment risks and groupwide risks is carried out by Con-
of the Group are represented.
trolling and the relevant departments. The risks that have been
The members of the compliance team at KION GROUP AG
reported are reviewed on a quarterly basis and re-assessed until
are available to advise all Group employees and answer their
there is no longer any reason to report a risk.
questions at any time. They are also responsible for the imple-
mentation of the compliance programme, particularly for provid-
2.4 Compliance management system
ing advice, information and training.
Actual or suspected incidents of non-compliance can be
The Executive Board and Supervisory Board of KION GROUP AG
reported by post, email or fax. All employees can also report any
consider that adhering uncompromisingly to broad-ranging com-
cases of non-compliance via a compliance hotline and can
pliance standards is essential to sustained financial success.
choose to remain anonymous.
That is why a comprehensive compliance programme, centring
As part of its work, the compliance department at KION
around the KION Group Code of Compliance, has been set up for
GROUP AG cooperates closely with the legal and internal audit
KION GROUP AG and its Group companies worldwide.
departments. The KION compliance committee is staffed by the
The KION Group Code of Compliance, which is available in all
heads of these departments and the head of human resources,
of the main languages relevant to the Group companies of KION
operating as a cross-functional committee that primarily advises on,
GROUP AG, provides every employee with clear guidance on
examines and, if relevant, punishes incidents of non-compliance
how to conduct their business in accordance with sound values
that are reported. While the KION compliance department is
and ethics and in compliance with the law. The aim is that all
responsible for preventing compliance violations, the internal audit
employees should receive regular training on the most important
unit is tasked with checking the facts of reported non-compliance
compliance subjects (e.g. competition law, data protection, com-
cases. On behalf of the Executive Board, the internal auditors also
munication and anti-corruption). Desk-based employees can use
monitor subsidiaries for compliance with regulations. If their
e-learning tools to complete the mandatory training.
audits confirm cases of non-compliance, it is the task of HR or
Compliance activities focus on anti-corruption, foreign trade/
Legal to remedy the violations and sanction those responsible, if
export controls, liability of senior management, directors’ and
appropriate.
officers’ liability, capital markets compliance, IT security and data
The Management Boards of the KION brand parent compa-
protection.
nies and their subsidiaries are responsible for ensuring compliance.
KION GROUP’s compliance organisation is made up of the
The Local Compliance Representatives advise and support the
following committees, functions and duties:
directors and senior managers in ensuring compliance through-
The Executive Board of KION GROUP AG bears collective
out the Group.
responsibility for the functioning of compliance management
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Corporate governance report
47
2.5 Audit-relevant processes
taken to ensure that this role at a major shareholder of the Com-
pany does not create a conflict of interest relating personally to Mr
The KION Group’s separate financial statements and management
Riske. Formal processes have been put in place to ensure that Mr
report, and the consolidated financial statements and group man-
Riske, in his role as a non-executive director of Weichai Power, will
agement report, which are prepared by the Executive Board of KION
not be involved in transactions that could give rise to a conflict
GROUP AG, are audited by an independent auditor, discussed by
with the interests of the KION Group. Nor will Mr Riske will be
the Audit Committee and approved by the Supervisory Board.
involved in transactions relating to the exercise of voting rights by
The independent auditor reviews the condensed consoli-
Weichai Power or its subsidiaries at the Annual General Meeting
dated interim financial statements and the condensed interim
of KION GROUP AG. It has been ensured that Mr Riske maintains
group management report for the first half of the year. The Exec-
a strict separation between his duties as a non-executive director
utive Board discusses all interim reports with the Audit Committee
of Weichai Power and his duties as Chief Executive Officer of
before they are published.
KION GROUP AG and that he fulfils all of his legal obligations in
the interests of the Company.
2.6 Avoiding conflicts of interest
Conflicts of interest between the governing bodies and other
3. Working methods of the Executive Board
decision-makers in the Company or significant shareholders go
against the principles of good corporate governance and are
likely to be harmful to the Company. KION GROUP AG and its
and Supervisory Board and composition of
the committees of the Supervisory Board
governing bodies therefore adhere strictly to the Code’s recom-
The Executive Board and Supervisory Board of KION GROUP AG
mendations on this subject. The employees of KION GROUP AG
have a close and trusting working relationship. It focuses on
and its investees are made aware of the problem of conflicts of
ensuring the sustained success of the Company. The members
interest as part of compliance training and are bound by rules on
of the Executive Board regularly attend Supervisory Board meet-
how to behave in the event of actual or potential conflicts of interest.
ings, unless the Supervisory Board decides to meet without the
The Company attaches high priority to preventing possible
Executive Board.
conflicts of interest from occurring in the first place and to dis-
The Board of Management promptly, comprehensively and
pelling any impression that they might exist. This is especially
regularly reports to the Supervisory Board on the performance of
important given the involvement of Weichai Power, whose stake
the KION Group. Besides the reporting obligations defined by
has risen to 33.3 per cent, and of long-standing shareholders
law, the rules of procedure for the Executive Board of KION
Goldman Sachs and KKR, who exerted considerable influence
GROUP AG set out further reporting requirements and reserva-
over the Company’s Executive Board in the years before KION
tions of approval in favour of the Supervisory Board.
GROUP AG’s conversion to a public limited company and its IPO.
As at 31 December 2014, they still held 18.8 per cent of the Com-
3.1 Working methods of the Executive Board
pany’s shares via their joint equity investment company Superlift.
The Company aims to avoid business scenarios or personnel
Until the departure of Executive Board members Theodor Maurer
scenarios that could give the impression of a conflict of interest
and Bert-Jan Knoef on 15 January 2015, the Executive Board of
and by taking transparent steps that effectively prevent concerns
KION GROUP AG comprised five members. It is responsible for
about conflicts of interest.
managing the Company in the Company’s interest, i.e. taking
The Company’s Chief Executive Officer, Mr Gordon Riske,
account of shareholders, customers, employees and other stake-
was appointed a non-executive director of Weichai Power with
holders with the aim of creating sustainable added value. The
effect from 24 June 2013, for which the Supervisory Board had
Executive Board develops the Company’s strategy, discusses it
previously given its consent. Appropriate precautions have been
with the Supervisory Board and ensures that it is implemented.
We keep the world moving.KION GROUP AG | Annual Report 2014 48
Every Executive Board member is responsible for his or her own
Every Executive Board member must disclose potential conflicts
area of responsibility, and keeps his or her fellow board members
of interest to the Supervisory Board immediately and must also
informed of developments on an ongoing basis. > TABLE 003
inform the other Executive Board members. All transactions
between KION GROUP AG and Executive Board members or
parties or companies closely associated with them must be con-
Responsibilities within the Executive Board
TABLE 003
cluded on an arm’s-length basis.
Executive Board
Responsibilities
Gordon Riske
CEO KION GROUP AG
CEO STILL GmbH (from 15 January 2015)
CEO Linde Material Handling GmbH
(from 15 January 2015)
Strategy/Business Development
Corporate Communications
Corporate Office
Internal Audit
Compliance
KION Warehouse Systems
KION Synergies/Platforms
North America Region
South America Region
Quality (from 15 January 2015)
Rules of procedure laid down by the Supervisory Board
define the areas of responsibility of the Executive Board members
and the way in which they work together. The full Executive Board
normally meets every 14 days and meetings are chaired by the
CEO. Individual Executive Board members sometimes take part
via video conference. At the meetings, the board members dis-
cuss measures and business that, under the Executive Board’s
rules of procedure, require the approval of the full Executive
Board. Resolutions of the full Executive Board are passed by simple
majority unless a greater majority is required by law. The chair-
man has a casting vote in the event of a tied vote. Resolutions of
the Executive Board may also be adopted between meetings.
Taking account of the requirements of section 90 AktG, the Exec-
utive Board provides the Supervisory Board with regular, timely
Dr Thomas Toepfer CFO KION GROUP AG
and comprehensive information on all matters of relevance to the
Accounting, Tax & Financial Services
Corporate Finance/Investor Relations/M&A
Controlling
HR/Labour Relations Director
Legal
IT
Purchasing
Data Protection
Logistics/Urban (from 15 January 2015)
Facility Management/Health Safety Environ-
ment (from 15 January 2015)
Executive Board member KION GROUP AG
CEO STILL GmbH
Logistics / Urban
Executive Board member KION GROUP AG
CEO Linde Material Handling GmbH
Quality
Facility Management / Health Safety
Environment
Executive Board member KION GROUP AG/
Chief Asia Pacific Officer
Asia Pacific Region
business as a whole relating to operating policy, strategic plan-
ning, business performance, financial position, financial perfor-
mance and business risks. The Chief Executive Officer meets
regularly with the chairman of the Supervisory Board to discuss
these matters.
The Executive Board’s rules of procedure specify that impor-
tant transactions are subject to approval by the Supervisory Board.
Budget planning, major acquisitions or capital expenditure, for
example, require the consent of the Supervisory Board.
The Company is represented by two members of the Executive
Board, by one member of the Executive Board acting conjointly
with a Prokurist (person with full commercial power of representa-
tion), or by two Prokurists.
3.2 Working methods of the Supervisory Board
The Supervisory Board of KION GROUP AG advises and monitors
the Executive Board in its management of the Company and reviews
its work. The Supervisory Board is fully involved from an early stage
in all decisions that are fundamental to KION GROUP AG.
Bert-Jan Knoef
(until 15 January
2015)
Theodor Maurer
(until 15 January
2015)
Ching Pong Quek
We keep the world moving.KION GROUP AG | Annual Report 2014
CORPORATE GOVERNANCE
Corporate governance report
49
The Supervisory Board of KION GROUP AG consists of 16 mem-
requirements for the proportion of female members of supervisory
bers, eight of whom are employee representatives and eight
boards. Since the appointment of Ms Birgit Behrendt and Ms Xu
are shareholder representatives. The shareholder representa-
Ping as members of the KION GROUP AG Supervisory Board with
tives are elected individually by the Annual General Meeting by
effect from 1 January 2015, there have been three female members.
simple majority.
The Supervisory Board will also support the inclusion of other
The Supervisory Board has drawn up rules of procedure for
female Board members who meet the above criteria.
its work. These apply in addition to the requirements of the arti-
cles of incorporation and also define the Supervisory Board com-
3.4 Working methods and composition of the committees of
mittees. According to these rules, the chairman of the Supervi-
the Executive Board and Supervisory Board
sory Board coordinates its work and the cooperation with the
Executive Board, chairs its meetings and represents it externally.
In the year under review, there were four committees at KION
The Supervisory Board meets in person at least twice in each half
GROUP AG whose tasks, responsibilities and work processes
of a calendar year, and adopts its resolutions at these meetings.
comply with the provisions of the German Stock Corporation Act
Between these meetings, resolutions may also be adopted in
(AktG) and the German Corporate Governance Code. The chairman
writing, by telephone or by other similar forms of voting, provided
of each committee reports regularly to the full Supervisory Board on
that the chairman of the Supervisory Board or, in his absence, his
the committee’s work. The committees have each drawn up rules of
deputy, decides on this procedure for the individual case con-
procedure that define their tasks and working methods.
cerned. The Supervisory Board adopts resolutions by a simple
majority of the votes cast unless a different procedure is pre-
Executive Committee
scribed by law. If a vote is tied, the matter will only be renegotiated
The Executive Committee consists of four shareholder represent-
if the majority of the Supervisory Board vote in favour of this
atives and four employee representatives. Its chairman is always
option. Otherwise the Board must vote again without delay. If this
the chairman of the Supervisory Board. It prepares the meetings
new vote on the same matter also results in an equal number of
of the Supervisory Board and is responsible for ongoing matters
votes for and against, the chairman of the Supervisory Board has
between Supervisory Board meetings. The Executive Committee
a casting vote.
also prepares the Supervisory Board’s decisions relating to cor-
porate governance, particularly amendments to the comply-or-ex-
3.3 Objectives for the composition of the Supervisory Board
plain statement pursuant to section 161 AktG reflecting changed
circumstances and the checking of adherence to the comply-or-ex-
The Supervisory Board strives to ensure that its composition is
plain statement. It also prepares documents for the Supervisory
appropriate to its responsibilities and obligations. In particular, this
Board when Executive Board members are to be appointed or
means considering members’ individual qualities and skills as well
removed and, if applicable, when a new Chief Executive Officer is
as the specific requirements resulting from the global business
to be appointed. Documents relating to any matters in connection
activities of KION GROUP AG and its Group companies. The Super-
with Executive Board remuneration are also prepared by the
visory Board is therefore of the opinion that the priority in aiming for
Executive Committee. The Executive Committee is also responsi-
a board composition based on diversity must be on the expertise of
ble for resolutions concerning the conclusion, amendment and ter-
the individual members and on a balanced mix of personal qualities,
mination of Executive Board employment contracts and agree-
experience, skills, qualifications and knowledge of all members in
ments with Executive Board members governing pensions,
line with the requirements of the business. Consequently, it has
severance packages, consultancy and other matters and for reso-
agreed upon guidelines for the selection of Supervisory Board mem-
lutions about any matters arising as a result of such contracts and
bers in the form of a diversity statement. This also means that the
agreements, unless they relate to remuneration. The responsibili-
Supervisory Board’s aim is to have an appropriate number of women
ties of the Executive Committee also include resolutions about
on the Supervisory Board and to comply with the new statutory
the extension of loans to Executive Board members, Supervisory
We keep the world moving.KION GROUP AG | Annual Report 2014 50
Board members and parties related to them within the meaning
Audit Committee
of sections 89 and 115 AktG, as well as resolutions to approve
The Audit Committee has four members, who are elected by the
contracts with Supervisory Board members outside their Super-
Supervisory Board. Its purpose is to assist the Supervisory Board
visory Board remit. The Executive Committee should – in consul-
in performing its task of monitoring accounting processes, com-
tation with the Executive Board – regularly deliberate on long-term
pliance matters and reporting. These responsibilities encompass
succession planning for the Executive Board.
monitoring the quality and integrity of the consolidated and sepa-
rate financial statements (as well as related disclosures), the internal
In 2014, the members of the Executive Committee were:
control mechanisms, risk management and the internal audit sys-
Dr John Feldmann (chairman)
Joachim Hartig (deputy chairman)
Dr Alexander Dibelius
Denis Heljic
Johannes P. Huth
Jiang Kui
Thilo Kämmerer (until 31 August 2014)
Olaf Kunz (from 24 September 2014)
Kay Pietsch
Mediation Committee
tem. The Audit Committee also reviews the work carried out by
the independent auditor and checks that the independent auditor
is qualified and independent. It is also responsible for engaging
the independent auditor, determining the focus of the audit and
agreeing the fee. In addition, the Audit Committee exercises the
rights in investee companies set forth in section 32 (1) MitbestG.
In 2014, the members of the Audit Committee were:
Hans Peter Ring (chairman)
Kay Pietsch (deputy chairman)
Dr John Feldmann
The Mediation Committee comprises the chairman of the Super-
Alexandra Schädler
visory Board, his deputy, an employee representative and a
shareholder representative. If the two-thirds-of-votes majority
As an independent member of the Audit Committee, the chairman,
required by section 27 (3) and section 31 (3) of the German Code-
Hans Peter Ring, has the required expertise in the areas of account-
termination Act (MitbestG) is not reached in a vote by the Super-
ancy and auditing specified in sections 100 (5) and 107 (4) AktG.
visory Board on the appointment of an Executive Board member,
the Mediation Committee must propose candidates for the post
Nomination Committee
to the Supervisory Board within one month. The chairman of the
The Nomination Committee has four members, all of whom are
Supervisory Board does not have a casting vote on the candi-
shareholder representatives and are elected by the shareholder
dates proposed.
representatives on the Supervisory Board. The Nomination Com-
mittee’s only task is to propose new candidates for the Supervi-
In 2014, the members of the Mediation Committee were:
sory Board to the Company’s Annual General Meeting.
Dr John Feldmann (chairman)
Joachim Hartig (deputy chairman)
Johannes P. Huth
Kay Pietsch
In 2014, the members of the Nomination Committee were:
Dr John Feldmann (chairman)
Dr Martin Hintze (deputy chairman,
until 31 December 2014)
Dr Alexander Dibelius (from 1 January 2015)
Dr Johannes Huth (from 1 January 2015)
Jiang Kui
Silke Scheiber (until 31 December 2014)
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Corporate governance report
51
EXECUTIVE BOARD AND SUPER-
VISORY BOARD SHAREHOLDINGS
AND DIRECTORS’ DEALINGS
1. Shareholdings
2. Directors’ dealings
Pursuant to section 15a of the German Securities Trading Act
(WpHG), members of the Executive Board and the Supervisory
Board and related parties are obliged to disclose transactions
involving shares in the Company or related financial instruments
(such as derivatives) if the value of these transactions reaches
As at 31 December 2014, the shares in KION GROUP AG or
€5,000 or more within one calendar year. > TABLE 004
related financial instruments held directly or indirectly by all mem-
bers of the Executive Board and Supervisory Board equated to
less than 1 per cent of all the shares issued by the Company.
Transactions pursuant to section 15a (WpHG) in 2014
TABLE 004
Buyer/Seller
Holger Brandt
Theodor Maurer
Bert-Jan Knoef
Type of transaction
Date of transaction
Share price (€)
Number of
shares
Total value (€)
Sale
Sale
Sale
24 February 2014/
24 March 2014 *
13 August 2014
10 November 2014
35.1681
5,175
181,994.92
29.20
30.702
25,000
24,350
730,000.00
747,593.70
* The report dated 24 March 2014 refers to the report dated 26 February 2014, in which it was only possible to state a provisional sale price of €36.7250 for the 5,175 shares. The report
dated 26 February 2014 also stated that a second report concerning these 5,175 shares would be made once the final sale price had been determined. Mr Brandt has known the final
sale price since 19 March 2014. It was determined by adjusting the provisional price of €36.725 per share, which was set on the day the shares were transferred to the broker, when the
sale of the shares was completed in such a way as to avoid disrupting the market (which required an extended selling period). The price was adjusted by the payment of a premium of
€1.5569, which was equivalent to the weighted average sale price achieved on each trading day. At the end of the sale period, this produced a final sale price of €35.1681.
We keep the world moving.KION GROUP AG | Annual Report 2014 52
Disclosures relevant to acquisitions,
section 315 (4) HGB
The disclosures relevant to acquisitions pursuant to section 315 (4)
converted into shares in the Company or options that can be
HGB together with the explanatory report form an integral part of
exercised or exchanged to obtain shares in the Company. Under
the group management report.
this agreement, KMB was not permitted to offer, pledge, allocate,
1. Composition of subscribed capital
sell or undertake to sell the shares concerned, sell call options or
call contracts, buy put options, or grant call options, purchasing
rights or subscription rights. It complied in full with this obligation
until it lapsed on 29 June 2014.
The subscribed capital (share capital) of KION GROUP AG
The Executive Board understands that KION GROUP AG’s
amounted to €98.9 million as at 31 December 2014. It is divided
two major shareholders, Superlift Holding S.à r.l. (‘Superlift’) and
into 98.9 million no-par-value bearer shares. The share capital is
Weichai Power (Luxembourg) Holding S.à r.l. (‘Weichai Power’)
fully paid-up. All of the shares in the Company give rise to the
have entered into a shareholder agreement in which they have
same rights and obligations. Each share confers one vote and
both undertaken to coordinate their voting at the Annual General
entitlement to an equal share of the profits. The rights and obliga-
Meeting of the Company in respect of certain resolutions. Fur-
tions arising out of the shares are defined by legal provisions. As
thermore, the Executive Board understands that Superlift and
at 31 December 2014, the Company held 163,562 shares in
Weichai Power have come to an arrangement in the shareholder
treasury. The primary intention is to offer these treasury shares to
agreement to grant each other a mutual right of first offer in
staff as part of the KION Employee Equity Programme (KEEP).
respect of the shares held by the other shareholder, but this
arrangement expired in the course of 2014.
KION GROUP AG has no rights arising from the treasury
2. Restrictions on voting rights or the transfer
shares that it holds (section 71b AktG).
of shares
There are generally no restrictions with respect to voting rights or
the transfer of shares in the Company. In accordance with the
legal provisions applicable to bearer shares, all of the shares in
3. Direct or indirect shareholdings in the
Company that represent more than
10 per cent of the voting rights
the Company can be traded freely.
As at 31 December 2014, KION Management Beteiligungs
As far as the Company is aware, the following companies directly
GmbH & Co. KG (KMB) held shares in the Company on behalf of
or indirectly held more than 10 per cent of the voting rights in
managers employed by the Company and its subsidiaries. KMB
KION GROUP AG as at 31 December 2014:
made an undertaking to the syndicate banks underwriting the IPO
regarding the shares held by KMB for members of the Executive
Board of the Company, the Executive Board of KION Material
Handling GmbH and the Management Boards of Linde Material
– Superlift with a direct shareholding of 18.8 per cent of the
voting rights
Handling GmbH and STILL GmbH at the time the underwriting
Pursuant to the German Securities Trading Act (WpHG), the
agreement was signed as part of the IPO. It undertook not to dis-
shareholding held by Superlift is deemed to belong to the fol-
pose of these shares within a period of twelve months from the
lowing other companies:
day after the Company’s first day of trading on the stock
> TABLE 005
exchange, i.e. until 29 June 2014. This obligation also included
other securities of the Company, including securities that can be
We keep the world moving.KION GROUP AG | Annual Report 2014
CORPORATE GOVERNANCE
Disclosures relevant to acquisitions
53
Companies to which Superlift is deemed to belong TABLE 005
Companies to which Superlift is deemed to belong TABLE 005
Company
KKR & Co. L.P.
KKR 1996 Overseas, Limited
KKR 2006 Fund (Overseas),
Limited Partnership
KKR 2006 Limited
Registered office
Company
Wilmington, USA
GSCP V AIV, L.P.
George Town,
Cayman Islands
George Town,
Cayman Islands
George Town,
Cayman Islands
GS Capital Partners V Employee
Funds GP, L.L.L.
GS Advisors V AIV, Ltd.
Goldman, Sachs & Co.
Registered office
George Town,
Cayman Islands
Wilmington, USA
George Town,
Cayman Islands
New York, USA
KKR Associates 2006 (Overseas),
Limited Partnership
George Town,
Cayman Islands
The Goldman Sachs Group, Inc.
Wilmington, USA
KKR Associates Europe II,
Limited Partnership
KKR Europe II Limited
KKR European Fund II,
Limited Partnership
KKR Fund Holdings GP Limited
KKR Fund Holdings L.P.
KKR Group Holdings L.P.
KKR Group Limited
KKR Management LLC
KKR Partners (International),
Limited Partnership
Calgary, Canada
George Town,
Cayman Islands
Calgary, Canada
George Town,
Cayman Islands
George Town,
Cayman Islands
George Town,
Cayman Islands
George Town,
Cayman Islands
Wilmington, USA
Calgary, Canada
KKR PEI GP LIMITED
George Town,
Cayman Islands
KKR PEI Investments, L.P.
St. Peter Port, Guernsey
GS Capital Partners V Employee
Fund, L.P.
GSCP V Institutional AIV, L.P.
GS Capital Partners V Offshore, L.P.
GS Capital Partners V
GmbH & Co. KG
Wilmington, USA
George Town,
Cayman Islands
George Town,
Cayman Islands
Frankfurt am Main,
Germany
GS Advisors V, L.L.C.
Wilmington, USA
– Weichai Power with a direct shareholding of 33.3 per cent of
the voting rights
Pursuant to WpHG, the shareholding held by Weichai Power
is deemed to belong to the following other companies:
> TABLE 006
Companies to which Weichai Power
is deemed to belong
TABLE 006
Company
Registered office
Shandong Heavy Industry
Group Co., Ltd.
Weichai Power Co., Ltd.
Jinan,
People's Republic of China
Weifang,
People's Republic of China
Weifang,
People's Republic of China
Weichai Power Hong Kong Interna-
tional Development Co., Ltd.
Hong Kong,
People's Republic of China
Other
People’s Republic of China
Registered office
Beijing,
People's Republic of China
KKR PEI Associates, L.P.
St. Peter Port, Guernsey
Weichai Group Holdings Limited
We keep the world moving.KION GROUP AG | Annual Report 2014
54
On 12 February 2015, KKR and Goldman Sachs placed a further
important resolutions of the Annual General Meeting, these part-
4.8 million shares (4.9 per cent of KION shares) in the market. As
ners must convene a partners’ meeting of KMB and obtain the
a result of this transaction, the free float increased again, from
approval of the limited partners with regard to how to vote. The
47.7 per cent to 52.6 per cent. The proportion of shares held indi-
limited partners pass resolutions by simple majority when taking
rectly by KKR and Goldman Sachs via Superlift Holding therefore
a decision on how they should vote at the Shareholders’ Meeting
reduced from 18.8 per cent to 13.9 per cent.
of KION GROUP AG.
Since the reporting date, there may have been further
changes to the aforementioned shareholdings of which the Com-
pany is unaware. As the shares in the Company are bearer
shares, the Company only learns about changes to the size of
shareholdings if they are notifiable pursuant to the WpHG or other
6. Appointment and removal of members of
the Executive Board; amendments to the
articles of incorporation
regulations.
Members of the Company’s Executive Board are appointed and
removed in accordance with the provisions of sections 84 and 85
4. Shares with special rights that confer
AktG and section 31 MitbestG. Pursuant to article 6 (1) of the articles
authority to exert control over the Company
of incorporation of the Company, the Executive Board must have
a minimum of two members. The Supervisory Board determines
There are no shares with special rights that confer the authority to
the number of Executive Board members. Pursuant to section 84
exert control over the Company.
AktG and section 6 (3) of the Company’s articles of incorporation,
5. Type of voting right controls in cases where
employees hold some of the Company’s
capital and do not exercise their control
rights directly
the Supervisory Board may appoint a Chief Executive Officer and
a deputy.
Section 179 (1) sentence 1 AktG requires that amendments
to the articles of incorporation be passed by resolution of the
Annual General Meeting. In accordance with article 23 of the articles
of incorporation in conjunction with section 179 (2) sentence 2
AktG, resolutions at the Annual General Meeting on amendments
In connection with the acquisition of the business of the current
to the articles of incorporation are passed by simple majority of
KION GROUP AG from Linde AG in 2006, a relatively large group
the votes cast and by simple majority of the share capital repre-
of managers and executives in the KION Group were given the
sented in the voting unless a greater majority is specified as a
opportunity to indirectly acquire shares in KION GROUP AG’s
mandatory requirement under statutory provisions. The option to
legal predecessor, the former KION Holding 1 GmbH, through a
stipulate a larger majority than a simple majority in any other
limited partnership in KMB (see under 2 above). When KION
cases has not been exercised in the articles of incorporation.
Holding 1 GmbH was transformed into KION GROUP AG, these
The Supervisory Board is authorised in article 10 (3) of the
holdings were exchanged for shares in the new Company. The
articles of incorporation to amend the articles of incorporation
shares are not subject to internal restrictions, unless lock-up pro-
provided that such amendments relate solely to the wording.
visions apply because the executives concerned are members of
the Executive Board of KION GROUP AG or members of the
management board of a consolidated German subsidiary (see
7. Authority of the Executive Board to issue or
under 2 above).
buy back shares
At the Annual General Meetings of KION GROUP AG, KMB is
represented either by its general partner, KION Management
The Extraordinary General Meeting on 13 June 2013 authorised
Beteiligungs GmbH, or by its managing limited partners. Before
the Company, in the period up to 12 June 2016, to acquire for
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Disclosures relevant to acquisitions
55
treasury up to 10 per cent of all the shares in issue at the time of
conversion rights, warrants, mandatory conversion requirements
the resolution or in issue on the date the authorisation is exer-
or option obligations, or any combinations of these instruments,
cised, whichever is the lower. Together with other treasury shares
which can be perpetual and/or fixed-term (also referred to jointly
in possession of the Company or deemed to be in its possession
as ‘debt instruments’) for a total par value of up to €800 million. To
pursuant to section 71a et seq. AktG, the treasury shares bought
enable shares to be allocated to the holders/beneficial owners of
as a result of this authorisation must not exceed 10 per cent of the
the convertible bonds, warrant-linked bonds, profit-sharing rights
Company’s share capital at any time. The Company may sell the
and/or income bonds with conversion rights, warrants, manda-
purchased treasury shares through a stock exchange or by
tory conversion requirements or option obligations issued on the
means of an offer to all shareholders. It may also sell the shares in
basis of this authorisation granted by the Executive Board of
return for a non-cash consideration, in particular in connection
KION GROUP AG or of a German or non-German company in
with the acquisition of a business, parts of a business or equity
which KION GROUP AG directly or indirectly holds the majority of
investments. In addition, the treasury shares may be offered to
voting rights and capital, the share capital was increased by con-
employees of the Company or of an affiliated company as part of
ditional capital of up to €9.89 million by issuing up to 9.89 million
an employee share ownership programme. The treasury shares
new, no-par-value bearer shares in KION GROUP AG (2014
can also be retired. Share buyback for trading purposes is pro-
Conditional Capital).
hibited. The authorisation may be exercised on one or more
Restrictions were placed on the issuance of new shares and
occasions, for the entire amount or for partial amounts, in pursuit
debt instruments in accordance with the resolutions adopted by
of one or more aims, by the Company, by a subsidiary or by third
the Company’s Annual General Meeting on 19 May 2014.
parties for the account of the Company or the account of a sub-
Together, the proportion of the Company’s share capital attribut-
sidiary. At the choice of the Executive Board, the shares may be
able to the shares issued on the basis of the 2014 Authorised
purchased through the stock exchange, by way of a public pur-
Capital and the total number of shares issued to service the debt
chase offer made to all shareholders or by way of a public invitation
instruments issued on the basis of the aforementioned authorisa-
to shareholders to tender their shares.
tion must not exceed 10 per cent of the Company’s share capital,
After acquiring 200,000 shares in 2013, the Company again
either on the effective date of the authorisation or the date on
made use of the authorisation in 2014 and purchased a further
which it is exercised. This 10 per cent limit includes shares that
51,000 shares in the period from 10 September to 15 October
are issued during the term of the authorisation based on the 2014
2014. During the reporting year, 87,438 of the shares acquired
Authorised Capital, those that are issued, are required to be
were used as part of the KEEP employee share programme for
issued or may be issued from the 2014 Conditional Capital to ser-
the employees of the Company and certain Group companies
vice debt instruments, or shares that have been or will be issued
in Germany.
on the basis of a different authorisation, or are still required to be
Subject to the consent of the Supervisory Board, the Com-
issued to service a debt instrument or may be issued to do so.
pany’s Annual General Meeting resolved on 19 May 2014 to
In accordance with the resolutions adopted by the Company’s
authorise the Executive Board to increase the Company’s share
Annual General Meeting on 19 May 2014, new shares and debt
capital by up to €9.89 million by issuing up to 9.89 million new
instruments can be issued for cash or non-cash contributions.
no-par-value ordinary bearer shares for cash and/or non-cash
They must be offered for subscription to existing shareholders.
contributions on one or more occasions up to and including
Pursuant to section 186 (5) AktG, the new shares can also be
18 May 2019 (2014 Authorised Capital).
acquired by one or more banks provided they undertake to offer
On 19 May 2014, for the period up to and including 18 May
them to existing shareholders for subscription (indirect rights
2019, the Company’s Annual General Meeting also resolved to
issue). However, subject to the consent of the Supervisory Board,
authorise the Executive Board to issue, on one or more occa-
the Executive Board is authorised to disapply some or all of the
sions, bearer and/or registered convertible bonds, warrant-linked
pre-emptive rights of existing shareholders in the following cases:
bonds, profit-sharing rights and/or income bonds with or without
We keep the world moving.KION GROUP AG | Annual Report 2014 56
– in order to remove fractional amounts from shareholders’
– where new shares are issued for cash during a capital
subscription rights;
increase and the price at which the new shares are issued is
When profit-sharing rights and/or income bonds with no
conversion rights, warrants, mandatory conversion obligations or
option obligations are issued in return for cash or non-cash capi-
tal contributions, the Executive Board is authorised, subject to the
not significantly lower (as defined by section 186 (3) sentence
consent of the Supervisory Board, to exclude all pre-emption
4 AktG) than the market price for shares in the Company with
rights of shareholders, provided these profit-sharing rights and/or
the same rights, or if debt instruments are issued for cash
income bonds have a debt-like structure and do not give rise to
and the Executive Board reaches a view after due examina-
rights to membership of the Company or entitle the holder to a
tion that the issue price is not significantly lower then their
share of the proceeds of any liquidation and the coupon rate is
theoretical market value determined according to recognised
not based on levels of net income, distributable profit or divi-
principles of financial mathematics (section 186 (3) sentence
dends. In this case, the coupon rate and issue price of the prof-
4 AktG states that subscription rights can be excluded pro-
it-sharing rights and/or income bonds must also correspond to
vided the capital increase is less than 10 per cent of share
the market terms and conditions for comparable forms of finance
capital);
– where necessary in order to grant the same pre-emption
rights to holders/beneficial owners of conversion rights or
prevailing at the time they are issued.
Subject to the consent of the Supervisory Board, the Execu-
tive Board is authorised to determine the further details of the
warrants and/or holders/beneficial owners of mandatory
capital increase relating to the 2014 Authorised Capital and its
convertible bonds issued or to be issued by KION GROUP
implementation, particularly the rights conferred by the shares
AG or a company in which it has a majority shareholding as
and their terms and conditions of issue. In relation to debt instru-
those to which they would be entitled after exercising conver-
ments, it is authorised to determine further details about their
sion rights or warrants or meeting conversion obligations;
– where new shares are issued during capital increases in
return for non-cash contributions, particularly for the acquisi-
issuance, terms of issue and the supply of shares or to determine
them by mutual consent with the governing bodies of any major-
ity-held company that is issuing the debt instruments.
tion of a business, parts of a business or equity investments
or if debt instruments are issued in return for non-cash capi-
tal contributions and the exclusion of pre-emption rights is in
the interest of the Company.
If new shares are issued from the 2014 Authorised Capital, the
Executive Board is also authorised, subject to the consent of the
Supervisory Board, to exclude shareholders’ pre-emption rights in
order to allot shares to people who are employees or directors of
the Company or its subsidiaries. This exclusion of pre-emption
rights is limited to a maximum of 5 per cent of share capital, both on
the effective date of this authorisation and at the time it is exercised.
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Disclosures relevant to acquisitions
57
8 . Material agreements that the Company has
signed and that are conditional upon a
change of control resulting from a takeover
bid, and the consequent effects
In the event that a third party (with the exception of KKR and
Goldman Sachs, companies affiliated with them or funds or lim-
ited partnerships/partnerships owned by them or that are advised
or managed by them) acquires beneficial ownership of more than
50 per cent of all shares in KION GROUP AG, any loan facilities
In the event of a change of control resulting from a takeover bid,
drawn down would be immediately repayable and any that had
certain consequences are set out in the following contracts con-
not been drawn down would be automatically cancelled.
cluded between Group companies of KION GROUP AG and third
parties:
– Covenant agreement dated 14 February 2013 in connection
with the €450,000,000, 6.75 per cent, senior secured notes
– KION Material Handling GmbH has entered into an agreement
with Volkswagen AG for the supply of internal combustion
engines. This agreement includes a provision under which
either party may terminate the agreement without notice if
maturing in 2020 issued by KION Finance S.A., concluded
there is a change in ownership involving more than 50 per
between Deutsche Trustee Company Limited as trustee,
cent of the shares in either case.
KION Finance S.A. and KION Group GmbH (now KION Mate-
rial Handling GmbH).
In the event that a third party (with the exception of KKR and
Goldman Sachs, companies affiliated with them or funds or lim-
ited partnerships/partnerships owned by them or that are advised
or managed by them) acquires beneficial ownership of more than
9. Compensation agreements that the
Company has signed with the Executive
Board members or employees and that will
be triggered in the event of a takeover bid
50 per cent of all shares in KION GROUP AG, KION GROUP AG
No such agreements have been concluded between the Com-
will be obliged to submit an offer to acquire the aforementioned
pany and its current Executive Board members or employees.
debt instruments at a price of 101 per cent of their nominal value.
This offer must remain valid for a minimum of 30 days from the
date of the change of control.
– Senior facility agreement dated 23 December 2006 (and
amended on several occasions thereafter), concluded
between KION Group GmbH (now named KION Material
Handling GmbH) and, among others, the London branch of
UniCredit Bank AG.
We keep the world moving.KION GROUP AG | Annual Report 2014 58
Remuneration report
This remuneration report forms an integral part of the group man-
a measurement basis covering a number of years, thus providing
agement report for KION GROUP AG. In accordance with statu-
the members of the Executive Board with an incentive to con-
tory requirements and the recommendations of the German Cor-
tribute to the sustained and long-term growth of the Company.
porate Governance Code as amended 24 June 2014 (DCGK), it
The structure also takes into account both positive and negative
explains the main features of the remuneration system used for
performance.
the Executive Board and the Supervisory Board of the Company
In addition, the remuneration for all members of the Executive
and also discloses the remuneration paid to the individual mem-
Board is subject to upper limits on the amounts payable, both
bers of the Executive Board and the Supervisory Board in return
overall and also in terms of the variable components.
for the work that they carried out on behalf of the Company and
The pension entitlements consist of entitlements in respect of
its subsidiaries in 2014.
EXECUTIVE BOARD REMUNERATION
Remuneration system
Essential features of the
retirement, invalidity and surviving dependants’ benefits. The
Supervisory Board regularly reviews the structure and appropri-
ateness of Executive Board remuneration.
Non-performance-related remuneration
The Executive Board members of KION GROUP AG receive
non-performance-related remuneration in the form of a fixed
annual salary (basic remuneration) and additional benefits. The
fixed annual salary is paid at the end of each month in twelve
equal instalments, the last payment being made for the full month
Executive Board remuneration system
in which the Executive Board service agreements ends. The addi-
tional non-cash benefits essentially comprises use of a company
The remuneration of the Executive Board of KION GROUP AG is
car and the payment of premiums for accident insurance with
determined in accordance with the requirements of the German
benefits at a typical market level.
Stock Corporation Act (AktG) and the DCGK. It reflects the size
Additional special benefits have been agreed for Mr Quek
and complexity of the KION Group, its business and financial
because he has been sent from Singapore to China on foreign
situation, its performance and future prospects, the normal
assignment.
amount and structure of executive board remuneration in compa-
Mr Quek’s remuneration is therefore structured as if he were
rable companies and the internal salary structure. The Supervi-
liable for taxes and social security contributions in Singapore.
sory Board also took into account the relationship between the
KION GROUP AG pays the additional taxes and social security
Executive Board remuneration and the remuneration paid to
contributions that Mr Quek incurs in China and Germany. In 2014,
senior managers and the workforce of the Company as a whole,
the additional amount
involved
totalled €284,897
(2013:
including increases over the course of time. Other criteria used to
€316,045). The additional benefits agreed with Mr Quek include
determine remuneration included the remit and work to be car-
moreover the cost of trips home to Singapore for Mr Quek and his
ried out by the individual members of the Executive Board. The
family, a company car, rental payments in Xiamen and private
remuneration system was designed with support from external
health insurance. In 2014, the special additional benefits for
consultants working independently of the Executive Board and
Mr Quek amounted to a total of €107,997 (2013: €117,161). These
the Company.
special benefits will be granted for as long as Mr Quek’s desig-
The total remuneration paid to the Executive Board com-
nated place of work is Xiamen or until his service agreement with
prises a non-performance-related salary and non-perfor-
KION GROUP AG ends.
mance-related non-cash benefits, performance-related (variable)
remuneration and pension entitlements. When the variable remu-
neration structure was defined, the emphasis was on creating
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Remuneration report
59
Performance-related remuneration
Multiple-year variable remuneration
The performance-related remuneration components consist of a
variable remuneration component measured over one year and a
The multiple-year variable remuneration component is structured
variable remuneration component measured over several years in
in the form of a performance share plan. At the start of the three-
the form of a rolling performance share plan with a three-year
year performance period, a conditional entitlement to a certain
term.
target number of performance shares is granted. This number is
calculated by dividing the allocation value (in euros) for the par-
One-year variable remuneration
ticular Executive Board member by the fair value of one perfor-
mance share at the time of grant. The number of preliminary per-
The one-year variable remuneration is a remuneration compo-
formance shares defined in this way is adjusted depending on
nent linked to the business profitability and productivity of the
achievement of the two target values – total shareholder return
KION Group in the relevant financial year. Its amount is deter-
(TSR) for KION shares compared with the STOXX® Europe Total
mined by the achievement of targets based on the following KPIs:
Market Index (TMI) Industrial Engineering index and return on
earnings before interest, taxes and amortisation (EBITA), return
capital employed (ROCE) – over the performance period. Each
on capital employed (ROCE), revenue and net debt. They are
target has a 50 per cent weighting.
weighted as follows: 30 per cent for EBITA, 30 per cent for ROCE,
The possible range for target achievement for both elements
20 per cent for revenue and 20 per cent for net debt. The target
is 0 per cent to 150 per cent. If KION shares outperform the
values for the financial components are derived from the annual
STOXX® Europe TMI Industrial Engineering index by 10 per cent
budget and specified by the Supervisory Board.
and the ROCE targets defined each year on the basis of the
The possible range for target achievement is 0 per cent to
budget are achieved, total target achievement will be 100 per cent.
200 per cent. If the targets derived from the annual budget are
The amount paid for each tranche is determined by the final
achieved in full, target achievement is 100 per cent. The target
number of performance shares multiplied by the price of the
achievement levels for the weighted Company targets (EBITA,
Company’s shares (average price over the preceding 60 trading
ROCE, revenue and net debt) are added together to give the total
days) at the end of the performance period. Depending on
target achievement.
achievement of the individual targets defined by the Supervisory
The individual performance of the Executive Board members
Board at the start of the performance period (three-year target
is rated using a discretionary performance multiple with a factor
agreement form), the Supervisory Board can use a discretionary
of between 0.8 and 1.2. The factor is determined by the Supervi-
factor to make a final adjustment to the calculation of the amount
sory Board with reference to achievement of the individual targets
to be paid out at the end of the performance period by plus or
defined by the Supervisory Board in a target agreement form at
minus 20 per cent, although the maximum payment may not
the start of the year. The factor is applied to total target achieve-
exceed 200 per cent of the allocation value.
ment for the budget targets and results in payment of the individ-
The plan is a cash-settled long-term incentive plan that does
ual target bonus. The amount paid as one-year variable remuner-
not include the right to receive any actual shares. The first pay-
ation is capped at 200 per cent of the target bonus.
ment under the plan will be made in 2016.
In the event that an Executive Board member is not entitled
Under the requirements of German accounting standard
to remuneration for the entire year on which the calculation is
(GAS) 17 and IFRS 2, the total expense arising from share-based
based, the remuneration is reduced pro rata temporis.
payments and the fair value of the performance share plan on the
date of granting must be disclosed. > TABLE 007
We keep the world moving.KION GROUP AG | Annual Report 2014 60
Performance Share Plan 2014
Fair value of the perfor-
mance share plan on
the date of grant
Number of performance
shares granted 1
Fair value per
performance share
on date
of grant
€1,500,000
€1,000,000
€1,000,000
€830,000
€1,000,000
€5,330,000
54,427
36,284
36,284
30,116
36,284
193,395
€27.56
€27.56
€27.56
€27.56
€27.56
Gordon Riske
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
Total
TABLE 007
Expense for
share-based
remuneration
in 2014
€486,033
€324,016
€324,016
€268,936
€324,016
€1,727,017
1 The target number of performance shares is calculated by dividing the allocation value by the fair value of one performance share. In this calculation, the number of performance shares
is rounded to the nearest whole number where necessary.
Performance Share Plan 2013
Fair value of the
performance share
plan on the date of
grant
Number of
performance
shares
granted 1
Fair value per
performance share
on date
of grant
Expense for
share-based
remuneration
in 2013
Expense for
share-based
remuneration
in 2014
€1,500,000
€1,000,000
€1,000,000
€830,000
€1,000,000
€5,330,000
73,710
49,140
49,140
40,786
49,140
261,916
€20.35
€20.35
€20.35
€20.35
€20.35
€349,975
€233,317
€233,317
€193,652
€233,317
€859,620
€573,080
€573,080
€475,654
€573,080
€1,243,578
€3,054,514
Gordon Riske
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
Total
1 The target number of performance shares is calculated by dividing the allocation value by the fair value of one performance share. In this calculation, the number of performance shares
is rounded to the nearest whole number where necessary.
The total expense in 2014 amounted to €4,781,531 (2013:
tranche 2). The amount of the bonus depends on the weighted
€1,243,578).
average price of KION shares in the four weeks immediately
Prior to the IPO in 2013, Executive Board member Dr Thomas
preceding the payment of each tranche. The pro-rata expense for
Toepfer was granted a special bonus (to be payable in two tranches)
2014 was €0.8 million (2013: €0.6 million). In connection with the
dependent on a successful IPO and subject to the condition that
provision of this special bonus entitlement, Dr Toepfer paid a one-
Dr Toepfer remained employed by KION GROUP AG after the IPO
off capital contribution of €200,000 into the Company, which the
for a period of twelve months (for tranche 1) and 18 months (for
Company deducted from the net amount of a bonus for 2012 that
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Remuneration report
61
was due to be paid to Dr Toepfer in 2013. The IPO bonus became
Termination benefits
payable in 2014. Besides the capital contribution repayment,
Dr Toepfer was paid €755,285 for tranche 1 and €679,058 for
In line with the DCGK, all Executive Board service agreements
tranche 2.
Pension entitlements
provide for a severance payment equivalent to no more than two
years’ annual remuneration payable in the event of the contract
being terminated prematurely without good cause. The amount
of annual remuneration is defined as fixed salary plus the variable
KION GROUP AG grants its Executive Board members direct
remuneration elements, assuming 100 per cent target achieve-
entitlement to a company pension plan consisting of retirement,
ment and excluding non-cash benefits and other additional ben-
invalidity and surviving dependants’ benefits.
efits, for the last full financial year before the end of the Executive
When the Company was floated, the defined benefit entitle-
Board service agreement. If the Executive Board service agree-
ment for the Company’s Chief Executive Officer that had been
ment was due to end within two years, the severance payment is
granted to Mr Riske in his original service agreement was trans-
calculated pro rata temporis. If a service agreement is terminated
ferred to his Executive Board service agreement. The benefit
for good cause for which the Executive Board member con-
amounted to a maximum of 50 per cent of the most recent fixed
cerned is responsible, no payments are made to the Executive
annual salary after the end of the tenth year of service based on
Board member in question. The Company does not have any
his original service agreement.
commitments for the payment of benefits in the event of a prema-
For the ordinary members of the Executive Board, the pres-
ture termination of Executive Board agreements following a
ent value of the previous defined benefit plan at the time of the
change of control.
IPO was transferred as a starting contribution for new pension
Executive Board members are subject to a post-contractual
arrangements in the form of a defined-contribution plan. The new
non-compete agreement of one year. In return, the Company
defined-contribution plan is structured as a cash balance plan.
pays the Executive Board member compensation for the duration
For each of the ordinary members of the Executive Board, a fixed
of the non-compete agreement amounting to 100 per cent of his
annual contribution of €150,000 (€124,500 for Mr Quek) is paid
or her final fixed salary. Other income of the Executive Board
into their pension accounts for the duration of the member’s
member is offset against the compensation.
period of service on the Executive Board.
In the event that Mr Riske’s appointment is not extended for
Interest is paid on the pension account at the prevailing stat-
reasons for which he is not responsible and he has not reached
utory guaranteed return rate for the life insurance industry (appli-
the standard retirement age for the statutory pension or in the
cable maximum interest rate for the calculation of the actuarial
event that Mr Riske resigns for good cause before the end of his
reserves of life insurers pursuant to section 2 (1) German Regula-
appointment or suffers permanent incapacity after his period of
tion on the Principles Underlying the Calculation of the Premium
service as a result of sickness, he will receive transitional benefits
Reserve (DeckRV)) until an insured event occurs. If higher interest
of €264,000 per annum on the basis of previous contracts. Dur-
is generated by investing the pension account, it will be credited
ing his current term of office, the amount of the transitional bene-
to the pension account when an insured event occurs (surplus).
fits will rise by €12,000 each year up to a maximum amount of
The standard retirement age for the statutory pension applies.
€300,000 per annum. Severance payments in the event of early
Once Executive Board members have reached their 62nd birth-
termination of his appointment without good cause, compensa-
day, they are entitled to early payment of the pension. In the event
tion for the post-contractual non-compete agreement, pension
of invalidity or death, the contributions that would have been
benefits that Mr Riske receives due to his previous work for other
made until the age of 60 are added to the pension account,
employers and income from other use of his working capacity
although only a maximum of ten contributions will be added.
(with the exception of remuneration for work as a member of a
When an insured event occurs, the pension is paid as a lump sum
supervisory or advisory board or a board of directors) will be off-
or, following a written request, in ten annual instalments.
set against these transitional benefits.
We keep the world moving.KION GROUP AG | Annual Report 2014 62
If an Executive Board member suffers temporary incapacity, he or
for the three subsequent months, but only up to the point at which
she will receive their full fixed salary for a period of six months plus
the service agreement would otherwise have come to an end.
the one-year variable remuneration. In the event of temporary
incapacity for a further six months, the Executive Board member
will receive 80 per cent of his or her fixed salary, but only up to a
point at which the service agreement is terminated.
If an Executive Board member ceases to be employed by the
Remuneration paid to members of the
Executive Board in 2014
Company as a result of death, the Executive Board member or
The total remuneration granted to Executive Board members
his/her family members will be entitled to the fixed monthly remu-
for 2014 was €11,839,561 (minimum: €3,928,961, maximum:
neration for the month in which the service agreement ends and
€19,750,161) (2013: €12,528,938). Of this amount, €2,839,850
Benefits granted in 2014
Benefits granted
Non-perfor-
mance-related
components
Gordon Riske
CEO KION GROUP AG
Bert-Jan Knoef
Theodor Maurer
Executive Board member KION GROUP AG
Executive Board member KION GROUP AG
Since 11 Jan 2013
Since 11 Jan 2013
Fixed remuneration
€700,000
€800,000
€800,000
€800,000
€440,761
€500,000
€500,000
€500,000
€440,761
€500,000
€500,000
€500,000
2013
2014
2014 (min)
2014 (max)
2013
2014
2014 (min)
2014 (max)
2013
2014
2014 (min)
2014 (max)
Non-cash remuneration and
other benefits 1
€25,606
€18,560
€18,560
€18,560
€21,310
€18,898
€18,898
€18,898
€23,495
€17,547
€17,547
€17,547
Total
€725,606
€818,560
€818,560
€818,560
€462,071
€518,898
€518,898
€518,898
€464,256
€517,547
€517,547
€517,547
TABLE 008
Short-term
incentive
One-year variable
remuneration 2,3
Performance-
related
components
Share-based
long-term
incentive 4
Multiple-year variable
remuneration
Performance share plan 2
(29 Jun 2013 – 31 Dec 2015)
Performance share plan 2
(1 Jan 2014 – 31 Dec 2016)
IPO bonus tranche 1
(29 Jun 2013 – 29 Jun 2014)
IPO bonus tranche 2
(29 Jun 2013 – 31 Dec 2014)
€877,303
€700,000
€1,500,000
€1,500,000
€0
€0
€1,400,000
€3,000,000
€391,356
€400,000
€800,000
€391,356
€400,000
€800,000
€0
€0
€0
€0
€1,000,000
€1,000,000
€2,000,000
€1,000,000
€1,000,000
€2,000,000
€1,500,000
€1,000,000
€1,000,000
€1,500,000
€0
€3,000,000
€1,000,000
€0
€2,000,000
€1,000,000
€0
€2,000,000
Total
€3,102,909
€3,018,560
€818,560
€5,218,560
€1,853,427
€1,918,898
€518,898
€3,318,898
€1,855,612
€1,917,547
€517,547
€3,317,547
Pension expense 6
€422,727
€510,056
€510,056
€510,056
€89,965
€101,631
€101,631
€101,631
€56,967
€104,401
€104,401
€104,401
Total remuneration
€3,525,636
€3,528,616
€1,328,616
€5,728,616
€1,943,392
€2,020,529
€620,529
€3,420,529
€1,912,579
€2,021,948
€621,948
€3,421,948
1 Other, non-performance related, non-cash remuneration and other benefits include expenses and/or benefits in kind, such as the use of a company car and housing costs.
2 The amount shown for Mr Quek includes a flat-rate allowance of 30 per cent as part of a tax equalisation agreement.
3 The figure shown for one-year variable remuneration is based on a target achievement rate of 100 per cent (minimum: 0 per cent target achievement, maximum: 200 per cent target achievement).
4 Fair value on the date of grant.
5 Former members of the Executive Board of KION Holding 1 GmbH.
6 Service cost (IAS).
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Remuneration report
63
(2013: €2,534,753) was attributable to fixed non-performance-re-
figure shown for multiple-year variable remuneration is the fair
lated remuneration components, €7,910,600 (minimum: €0, max-
value of the performance share plans at the date of grant, which
imum: €15,821,200) (2013: €9,141,827) to variable one-year and
is equivalent to a target achievement rate of 100 per cent (mini-
multiple-year performance-related remuneration components,
mum: 0 per cent target achievement, maximum: 200 per cent tar-
€175,254 (2013: €221,744) to non-performance-related non-cash
get achievement). The first payment will be made in 2016, pro-
remuneration and other non-performance-related benefits, and
vided the Company’s long-term targets are achieved.
€913,857 (2013: €630,614) to the pension expense. The figure
The additional benefits were measured at the value calcu-
shown for one-year variable remuneration is based on a target
lated for tax purposes. > TABLE 008
achievement rate of 100 per cent (minimum: 0 per cent target
achievement, maximum: 200 per cent target achievement). The
TABLE 008
Gordon Riske
CEO KION GROUP AG
Bert-Jan Knoef
Theodor Maurer
Executive Board member KION GROUP AG
Executive Board member KION GROUP AG
Since 11 Jan 2013
Since 11 Jan 2013
Fixed remuneration
€700,000
€800,000
€800,000
€800,000
€440,761
€500,000
€500,000
€500,000
€440,761
€500,000
€500,000
€500,000
2013
2014
2014 (min)
2014 (max)
2013
2014
2014 (min)
2014 (max)
2013
2014
2014 (min)
2014 (max)
€25,606
€18,560
€18,560
€18,560
€21,310
€18,898
€18,898
€18,898
€23,495
€17,547
€17,547
€17,547
€725,606
€818,560
€818,560
€818,560
€462,071
€518,898
€518,898
€518,898
€464,256
€517,547
€517,547
€517,547
Short-term
incentive
One-year variable
remuneration 2,3
€877,303
€700,000
€1,400,000
€391,356
€400,000
€1,500,000
€1,500,000
€3,000,000
€1,000,000
€1,000,000
€0
€0
€0
€0
€800,000
€391,356
€400,000
€2,000,000
€1,000,000
€1,000,000
€0
€0
€800,000
€2,000,000
(29 Jun 2013 – 31 Dec 2015)
€1,500,000
€1,000,000
€1,000,000
€1,500,000
€0
€3,000,000
€1,000,000
€0
€2,000,000
€1,000,000
€0
€2,000,000
Total
€3,102,909
€3,018,560
€818,560
€5,218,560
€1,853,427
€1,918,898
€518,898
€3,318,898
€1,855,612
€1,917,547
€517,547
€3,317,547
Pension expense 6
€422,727
€510,056
€510,056
€510,056
€89,965
€101,631
€101,631
€101,631
€56,967
€104,401
€104,401
€104,401
Total remuneration
€3,525,636
€3,528,616
€1,328,616
€5,728,616
€1,943,392
€2,020,529
€620,529
€3,420,529
€1,912,579
€2,021,948
€621,948
€3,421,948
1 Other, non-performance related, non-cash remuneration and other benefits include expenses and/or benefits in kind, such as the use of a company car and housing costs.
2 The amount shown for Mr Quek includes a flat-rate allowance of 30 per cent as part of a tax equalisation agreement.
3 The figure shown for one-year variable remuneration is based on a target achievement rate of 100 per cent (minimum: 0 per cent target achievement, maximum: 200 per cent target achievement).
4 Fair value on the date of grant.
5 Former members of the Executive Board of KION Holding 1 GmbH.
6 Service cost (IAS).
Benefits granted in 2014
Benefits granted
Non-perfor-
mance-related
components
Performance-
related
components
Share-based
long-term
incentive 4
Non-cash remuneration and
other benefits 1
Total
Multiple-year variable
remuneration
Performance share plan 2
Performance share plan 2
(1 Jan 2014 – 31 Dec 2016)
IPO bonus tranche 1
(29 Jun 2013 – 29 Jun 2014)
IPO bonus tranche 2
(29 Jun 2013 – 31 Dec 2014)
We keep the world moving.KION GROUP AG | Annual Report 2014 64
Benefits granted in 2014 (continued)
Ching Pong Quek
Executive Board member KION GROUP AG/
Chief Asia Pacific Officer
Since 11 Jan 2013
Dr Thomas Toepfer
CFO KION GROUP AG
Former Executive Board members 5
TABLE 008
Benefits granted
Non-perfor-
mance-related
components
2013
2014
2014 (min)
2014 (max)
2013
2014
2014 (min)
2014 (max)
2013
2014
2014 (min)
2014 (max)
Fixed remuneration
€480,566
€539,850
€539,850
€539,850
€462,520
€500,000
€500,000
€500,000
€10,145
Non-cash remuneration and
other benefits 1
€123,502
€107,997
€107,997
€107,997
€26,605
€12,252
€12,252
€12,252
Total
€604,068
€647,847
€647,847
€647,847
€489,125
€512,252
€512,252
€512,252
Short-term
incentive
One-year variable
remuneration 2 , 3
Performance-
related
components
Share-based
long-term
incentive 4
Multiple-year variable
remuneration
Performance share plan 2
(29 Jun 2013 – 31 Dec 2015)
Performance share plan 2
(1 Jan 2014 – 31 Dec 2016)
IPO bonus tranche 1
(29 Jun 2013 – 29 Jun 2014)
IPO bonus tranche 2
(29 Jun 2013 – 31 Dec 2014)
Total
Pension expense 6
€438,989
€431,600
€1,079,000
€1,079,000
€0
€0
€863,200
€2,158,000
€577,362
€400,000
€800,000
€15,748
€1,870,713
€1,000,000
€2,000,000
€0
€0
€0
€1,079,000
€1,079,000
€0
€2,158,000
€1,000,000
€0
€2,000,000
€1,000,000
€433,141
€437,572
€2,122,057
€2,158,447
€647,847
€3,669,047
€2,937,200
€1,912,252
€512,252
€3,312,252
€96,836
€96,836
€96,836
€58,758
€100,933
€100,933
€100,933
Total remuneration
€2,122,057
€2,255,283
€744,683
€3,765,883
€2,995,958
€2,013,185
€613,185
€3,413,185
€1,226
€11,371
€27,119
€2,197
€29,316
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
1 Other, non-performance related, non-cash remuneration and other benefits include expenses and/or benefits in kind, such as the use of a company car and housing costs.
2 The amount shown for Mr Quek includes a flat-rate allowance of 30 per cent as part of a tax equalisation agreement.
3 The figure shown for one-year variable remuneration is based on a target achievement rate of 100 per cent (minimum: 0 per cent target achievement, maximum: 200 per cent target achievement).
4 Fair value on the date of grant.
5 Former members of the Executive Board of KION Holding 1 GmbH.
6 Service cost (IAS).
The total remuneration allotted to/earned by Executive Board
and other non-performance-related benefits, and €913,857
members for 2014 was €7,694,904 (2013: €5,851,985). Of this
(2013: €630,614) to the pension expense. The figure shown for
amount, €2,839,850 (2013: €2,534,753) was attributable to fixed
one-year variable remuneration is based on a preliminary total tar-
non-performance-related remuneration components, €3,765,943
get achievement rate of 100 per cent calculated using preliminary
(2013: €2,464,874) to variable one-year and multiple-year perfor-
earnings figures at the end of 2014. This preliminary variable
mance-related
remuneration components, €175,254
(2013:
remuneration for each Executive Board member is also subject to
€221,744) to non-performance-related non-cash remuneration
adjustment by the Supervisory Board in line with the individual
We keep the world moving.KION GROUP AG | Annual Report 2014
CORPORATE GOVERNANCE
Remuneration report
65
Benefits granted in 2014 (continued)
Benefits granted
Non-perfor-
mance-related
components
Performance-
related
components
Share-based
long-term
incentive 4
Non-cash remuneration and
other benefits 1
Total
Multiple-year variable
remuneration
Performance share plan 2
Performance share plan 2
(1 Jan 2014 – 31 Dec 2016)
IPO bonus tranche 1
(29 Jun 2013 – 29 Jun 2014)
IPO bonus tranche 2
(29 Jun 2013 – 31 Dec 2014)
Total
Pension expense 6
Executive Board member KION GROUP AG/
Ching Pong Quek
Chief Asia Pacific Officer
Since 11 Jan 2013
Dr Thomas Toepfer
CFO KION GROUP AG
Former Executive Board members 5
TABLE 008
2013
2014
2014 (min)
2014 (max)
2013
2014
2014 (min)
2014 (max)
2013
2014
2014 (min)
2014 (max)
Fixed remuneration
€480,566
€539,850
€539,850
€539,850
€462,520
€500,000
€500,000
€500,000
€10,145
€123,502
€107,997
€107,997
€107,997
€26,605
€12,252
€12,252
€12,252
€604,068
€647,847
€647,847
€647,847
€489,125
€512,252
€512,252
€512,252
€1,226
€11,371
Short-term
incentive
One-year variable
remuneration 2 , 3
€438,989
€431,600
€863,200
€577,362
€400,000
€1,079,000
€1,079,000
€2,158,000
€1,870,713
€1,000,000
(29 Jun 2013 – 31 Dec 2015)
€1,079,000
€1,000,000
€0
€0
€0
€0
€800,000
€15,748
€2,000,000
€0
€1,079,000
€0
€2,158,000
€1,000,000
€0
€2,000,000
€2,122,057
€2,158,447
€647,847
€3,669,047
€2,937,200
€1,912,252
€512,252
€3,312,252
€96,836
€96,836
€96,836
€58,758
€100,933
€100,933
€100,933
Total remuneration
€2,122,057
€2,255,283
€744,683
€3,765,883
€2,995,958
€2,013,185
€613,185
€3,413,185
€27,119
€2,197
€29,316
€433,141
€437,572
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
€0
1 Other, non-performance related, non-cash remuneration and other benefits include expenses and/or benefits in kind, such as the use of a company car and housing costs.
2 The amount shown for Mr Quek includes a flat-rate allowance of 30 per cent as part of a tax equalisation agreement.
3 The figure shown for one-year variable remuneration is based on a target achievement rate of 100 per cent (minimum: 0 per cent target achievement, maximum: 200 per cent target achievement).
4 Fair value on the date of grant.
5 Former members of the Executive Board of KION Holding 1 GmbH.
6 Service cost (IAS).
performance of the Executive Board member. This adjustment
may vary by +/- 20 per cent of the variable remuneration.
The additional benefits were measured at the value calcu-
lated for tax purposes. > TABLE 009
We keep the world moving.KION GROUP AG | Annual Report 2014
66
Allocation in 2014
Allocation
Non-perfor-
mance-related
components
Gordon Riske
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
CEO KION GROUP AG
Executive Board member
KION GROUP AG
Since 11 Jan 2013
Executive Board member
KION GROUP AG
Executive Board member
Chief Asia Pacific Officer
KION GROUP AG/
CFO KION GROUP AG
Since 11 Jan 2013
Since 11 Jan 2013
Fixed remuneration
€700,000
€800,000
€440,761
€500,000
€440,761
€500,000
€480,566
€539,850
€462,520
€500,000
€10,145
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
Non-cash remuneration and
other benefits 1
€25,606
€18,560
€21,310
€18,898
€23,495
€17,547
€123,502
€107,997
€26,605
€12,252
Total
€725,606
€818,560
€462,071
€518,898
€464,256
€517,547
€604,068
€647,847
€489,125
€512,252
Short-term
incentive
One-year variable
remuneration 2
€763,744
€700,000
€354,701
€400,000
€372,773
€400,000
€459,925
€431,600
€500,355
€400,000
€13,376
Performance-
related
components
Share-based
long-term
incentive
Multiple-year variable
remuneration
Performance share plan
(29 Jun 2013 – 31 Dec 2015)
Performance share plan
(1 Jan 2014 – 31 Dec 2016)
IPO bonus tranche 1
(29 Jun 2013 – 29 Jun 2014)
IPO bonus tranche 2
(29 Jun 2013 – 31 Dec 2014)
€0
€0
€0
€0
€0
€0
€0
€0
€0
€1,434,343
€0
Total
€1,489,350
€1,518,560
€816,772
€918,898
€837,029
€917,547
€1,063,993
€1,079,447
€989,480
€2,346,595
Pension expense 4
€422,727
€510,056
€89,965
€101,631
€56,967
€104,401
€96,836
€58,758
€100,933
Total remuneration
€1,912,077
€2,028,616
€906,737
€1,020,529
€893,996
€1,021,948
€1,063,993
€1,176,283
€1,048,238
€2,447,528
1 Other, non-performance related, non-cash remuneration and other benefits include expenses and/or benefits in kind, such as the use of a company car and housing costs.
2 The figure shown for one-year variable remuneration for 2013 is the actual amount paid out, which differs from the estimated value listed in the 2013 consolidated financial statements.
3 Former members of the Executive Board of KION Holding 1 GmbH.
4 Service cost (IAS).
At its meeting on 17 December 2014, the Supervisory Board
ments. Subsequently, agreement was reached with Mr Knoef
authorised the chairman of the Supervisory Board to hold talks
and Mr Maurer that they would resign from office with effect
with Mr Bert-Jan Knoef and Mr Theodor Maurer about the early
from 14 January 2015 and that their Executive Board service
termination of their appointment as members of the KION
agreements would end on 31 March 2015.
GROUP AG’s Executive Board, about the termination of their
As is the case with the remuneration paid to the Executive
Executive Board service agreements and about the conclusion
Board, the benefits granted to the two men comprise a
of appropriate termination agreements. The Supervisory Board
non-performance-related salary and non-performance-related
also authorised its chairman to conclude the necessary agree-
non-cash benefits, performance-related remuneration and
ments in accordance with contractual and statutory require-
pension entitlements.
TABLE 009
Former Executive
Board members 3
€1,226
€11,371
€24,747
€2,197
€26,944
€0
€0
€0
€0
€755,285
€679,058
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Remuneration report
67
Allocation in 2014
Allocation
Non-perfor-
mance-related
components
Performance-
related
components
Share-based
long-term
incentive
Non-cash remuneration and
other benefits 1
Total
Multiple-year variable
remuneration
Performance share plan
(29 Jun 2013 – 31 Dec 2015)
Performance share plan
(1 Jan 2014 – 31 Dec 2016)
IPO bonus tranche 1
(29 Jun 2013 – 29 Jun 2014)
IPO bonus tranche 2
(29 Jun 2013 – 31 Dec 2014)
Gordon Riske
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
CEO KION GROUP AG
Executive Board member
KION GROUP AG
Since 11 Jan 2013
Executive Board member
KION GROUP AG
Executive Board member
KION GROUP AG/
Chief Asia Pacific Officer
Since 11 Jan 2013
Since 11 Jan 2013
CFO KION GROUP AG
TABLE 009
Former Executive
Board members 3
Fixed remuneration
€700,000
€800,000
€440,761
€500,000
€440,761
€500,000
€480,566
€539,850
€462,520
€500,000
€10,145
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
2013
2014
Short-term
incentive
One-year variable
remuneration 2
€763,744
€700,000
€354,701
€400,000
€372,773
€400,000
€459,925
€431,600
€500,355
€400,000
€13,376
€25,606
€18,560
€21,310
€18,898
€23,495
€17,547
€123,502
€107,997
€26,605
€12,252
€725,606
€818,560
€462,071
€518,898
€464,256
€517,547
€604,068
€647,847
€489,125
€512,252
€1,226
€11,371
€0
€0
€0
€0
€0
€0
€0
€0
€0
€1,434,343
€0
Total
€1,489,350
€1,518,560
€816,772
€918,898
€837,029
€917,547
€1,063,993
€1,079,447
€989,480
€2,346,595
Pension expense 4
€422,727
€510,056
€89,965
€101,631
€56,967
€104,401
€96,836
€58,758
€100,933
Total remuneration
€1,912,077
€2,028,616
€906,737
€1,020,529
€893,996
€1,021,948
€1,063,993
€1,176,283
€1,048,238
€2,447,528
€24,747
€2,197
€26,944
€755,285
€679,058
1 Other, non-performance related, non-cash remuneration and other benefits include expenses and/or benefits in kind, such as the use of a company car and housing costs.
2 The figure shown for one-year variable remuneration for 2013 is the actual amount paid out, which differs from the estimated value listed in the 2013 consolidated financial statements.
3 Former members of the Executive Board of KION Holding 1 GmbH.
4 Service cost (IAS).
€0
€0
€0
€0
Mr Knoef’s total amount of €4,546,755 breaks down into a
Mr Maurer’s total amount of €4,248,034 breaks down into a
non-performance-related component of €4,070,712, a perfor-
non-performance-related component of €3,771,991, a perfor-
mance-related component without a long-term incentive of
mance-related component without a long-term incentive of
€84,444, a performance-related component with a long-term
€84,444, a performance-related component with a long-term
incentive – at the fair value for the 2013 and 2014 tranches pursu-
incentive – at the fair value for the 2013 and 2014 tranches pursu-
ant to the terms of the performance share plan as at 31 Decem-
ant to the terms of the performance share plan as at 31 Decem-
ber 2014 – of €194,562, plus the pro-rata value for 2015 of the
ber 2014 – of €194,562, plus the pro-rata value for 2015 of the
shares allotted of €70,370 and pension expenses of €126,667.
shares allotted of €70,370 and pension expenses of €126,667.
We keep the world moving.KION GROUP AG | Annual Report 2014 68
The table below shows the pension contributions (additions to the
defined benefit obligations to former members of the Executive
plan) attributable to each individual Executive Board member and
Board or their surviving dependants amounting to €6,082,485
their separate present values. > TABLE 010
(2013: €5,171,114) were recognised in accordance with IAS 19.
In the year under review, no advances were made to mem-
The total remuneration paid to former members of the Executive
bers of the Executive Board, and there were no loans.
Board amounted to €209,616 (2013: €207,561). Provisions for
Pensions
Gordon Riske
Bert-Jan Knoef
Theodor Maurer
Ching Pong Quek
Dr Thomas Toepfer
TABLE 010
2014 service cost
2013 service cost
Present value (DBO)
31 Dec 2014
Present value (DBO)
31 Dec 2013
€510,056
€101,631
€104,401
€96,836
€100,933
€422,727
€89,965
€56,967
€0
€58,758
€4,562,340
€1,905,632
€637,569
€426,727
€523,314
€3,180,565
€1,642,647
€492,380
€265,443
€341,416
SUPERVISORY BOARD
REMUNERATION
Remuneration system
annual remuneration for members of a committee is €8,000,
while the chairman of a committee receives double this amount.
If a member of the Supervisory Board or one of its commit-
tees does not hold their position for a full financial year, remuner-
ation is reduced pro rata temporis.
The members of the Supervisory Board receive an attend-
ance fee of €1,250 per day for meetings of the Supervisory Board
The Supervisory Board’s remuneration is defined in article 18
and its committees, although they only receive this amount once
of KION GROUP AG’s articles of incorporation. Members of the
if they attend more than one meeting on the same day.
Supervisory Board receive fixed remuneration plus reimburse-
The Company reimburses each member for any VAT incurred
ment of out-of-pocket expenses. The annual remuneration
in connection with his or her remuneration.
amounts to €45,000 for ordinary members of the Supervisory
A D&O insurance policy without an excess has been taken
Board, €75,000 for the deputy chairman of the Supervisory
out for the members of the Supervisory Board.
Board and €105,000 for the chairman of the Supervisory Board.
Additional remuneration is paid for being a member or chair-
man of a committee, although this does not apply in the case of
the Nomination Committee or the Mediation Committee pursuant
to section 27 (3) German Codetermination Act (MitbestG). The
We keep the world moving.KION GROUP AG | Annual Report 2014 CORPORATE GOVERNANCE
Remuneration report
69
Remuneration paid to members of the
Supervisory Board in 2014
In 2014, no company in the KION Group paid or granted any
remuneration or other benefits to members of the Supervisory
Board for services provided as individuals, such as consulting or
The total remuneration paid to the Supervisory Board in 2014 was
brokerage activities. Nor were any advances or loans granted to
€1,183,555. Of this amount, €1,019,927 was attributable to remu-
members of the Supervisory Board.
neration for activities carried out by the Supervisory Board. The
remuneration paid for committee work totalled €163,628. The fol-
lowing table shows the breakdown of remuneration paid to each
Supervisory Board member for 2014. > TABLE 011
Supervisory Board remuneration
TABLE 011
Dr John Feldmann (chairman)
Joachim Hartig (deputy chairman)
Holger Brandt
Dr Alexander Dibelius
Denis Heljic
Dr Martin Hintze
Johannes P. Huth
Thilo Kämmerer
Olaf Kunz
Jiang Kui
Özcan Pancarci
Kay Pietsch
Hans Peter Ring
Alexandra Schädler
Silke Scheiber
Tan Xuguang
Hans-Peter Weiß
Total
Fixed remuneration
Committee
remuneration
Attendance fees
Total remuneration
€105,000
€75,000
€45,000
€45,000
€45,000
–
€65,838
€29,959
€15,041
€65,838
€45,000
€45,000
€45,000
€45,000
€65,838
€65,838
€45,000
€24,000
€8,000
–
€8,000
€8,000
–
€11,704
€5,326
€2,170
€11,704
–
€16,000
€16,000
€8,000
–
–
–
€18,750
€15,000
€13,750
€10,000
€15,000
–
€10,973
€7,500
€6,250
€18,288
€13,750
€21,250
€15,000
€18,750
€16,459
€1,829
€13,750
€147,750
€98,000
€58,750
€63,000
€68,000
–
€88,515
€42,785
€23,461
€95,830
€58,750
€82,250
€76,000
€71,750
€82,297
€67,667
€58,750
€848,352
€118,904
€216,299
€1,183,555
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Contents
71
Group Management Report
72
72
78
81
83
83
86
FUNDAMENTALS OF THE KION GROUP
Profile of the KION Group
Strategy of the KION Group
Management system
REPORT ON THE ECONOMIC POSITION
Macroeconomic and sector-specific conditions
Financial position and financial performance
104
Non-financial performance indicators
112
EVENTS AFTER THE REPORTING DATE
113
OUTLOOK, RISK REPORT AND OPPORTUNITY REPORT
113
115
122
Outlook
Risk report
Opportunity report
KION GROUP AG | Annual Report 2014
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72
Fundamentals of the KION Group
PROFILE OF THE KION GROUP
Organisational structure
applies are set out in the declaration on corporate governance.
This declaration also contains the comply-or-explain statement
pursuant to section 161 German Stock Corporation Act (AktG),
which was issued by the Executive Board and Supervisory Board
of KION GROUP AG on 19 December 2014, and the corporate
governance report pursuant to section 3.10 German Corporate
The KION Group is the world’s second-largest supplier of forklift
Governance Code, which also provides information about the
trucks, warehouse trucks and associated services and solutions.
compliance standards in the Group. The declaration on corporate
With three global brands – Linde, STILL and Baoli – and three
governance can be viewed and downloaded on the Company’s
regional brands, it is represented in all of the major sales markets
website (kiongroup.com/governancereport). It also forms part of
and price segments.
this annual report.
The KION Group’s strategic management holding company,
The essential features of the remuneration system are
KION GROUP AG, is listed on the Frankfurt Stock Exchange,
described in the remuneration report, which is part of the 2014
where it is part of the MDAX. KION GROUP AG indirectly owns all
group management report and can be found in the ‘remuneration
the shares in KION Material Handling GmbH. Its head office
report’ section of this annual report. The total amounts for
functions, consisting of administrative, financial and technical
Executive Board remuneration and Supervisory Board remuner-
services, and human resources, were transferred to the KION
ation are reported in the notes to the consolidated financial state-
GOUP AG on 1 September 2014 by means of a purchase and
ments (note [43]).
transfer agreement. Therefore KION GROUP AG replaced KION
Material Handling GmbH as the operational parent company of
Disclosures relevant to acquisitions
the KION GROUP.
The strategic anchor shareholder of KION GROUP AG is
The disclosures relevant to acquisitions (pursuant to section 315
Weichai Power (Luxembourg) Holding S.à r.l., Luxembourg, a
(4) HGB) together with the explanatory report form an integral part
subsidiary of Weichai Power Co. Ltd., which held 33.3 per cent of
of the group management report and can be found in the ‘disclo-
the shares at the end of 2014 as far as the Company is aware.
sures relevant to acquisitions’ section of this annual report.
Another 18.8 per cent of the shares were held, through Superlift
Holding S.à r.l., Luxembourg, by investment funds that are
Executive Board
advised by group companies of The Goldman Sachs Group, Inc.
(Goldman Sachs) and companies that are advised by or affiliated
The Executive Board of KION GROUP AG is responsible for the
with Kohlberg Kravis Roberts & Co. L.P. (KKR). The free float
operational management of the KION Group. The responsibilities
accounted for 47.7 per cent of the shares.
of the Executive Board members are allocated as follows:
Management and control
Corporate governance
– Gordon Riske, Chief Executive Officer (CEO), is responsible,
among other things, for the strategy/business development,
corporate communications, the corporate office, internal
audit, compliance, KION Warehouse Systems, KION syner-
gies/platforms, the North America region and the South
The KION Group follows generally accepted standards of sound,
America region. Since 15 Jan uary 2015, he has also been
responsible corporate governance. The German Corporate Gov-
CEO of both the Linde Material Handling GmbH and the
ernance Code (DCGK) provides the framework for management
STILL GmbH brand companies and has assumed responsi-
and control. As required by section 289a German Commercial
bility for quality.
Code (HGB), the corporate governance standards that the Group
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
73
– Dr Thomas Toepfer, Chief Financial Officer (CFO), is in charge,
among other things, of accounting, tax & financial services,
Business model
corporate finance/investor relations/M&A, controlling, HR
In order to fully cater to the needs of its material handling custom-
(Labour Relations Director), legal affairs, IT, purchasing and
ers worldwide, the KION Group’s business model covers every
data protection. On 15 January 2015, he also assumed
step of the value chain: product development, manufacturing,
responsibility for facility management/health, safety & envi-
sales and logistics, spare parts business, truck rental and used
ronment (HSE) and logistics/Urban.
– Ching Pong Quek is Chief Asia Pacific Officer and heads up
the KION Group’s entire Asia business.
trucks, system and software solutions, plus financial services that
support the Group’s core industrial business. The KION Group
operates a multi-brand strategy involving the three global brands
Linde, STILL and Baoli plus the three regional brands Fenwick,
Bert-Jan Knoef and Theodor Maurer stepped down as members
OM STILL and Voltas MH.
of the Company’s Executive Board with effect from 15 January
The KION Group earns most of its consolidated revenue –
2015. Until then, Mr Knoef had been CEO and Labour Relations
54.1 per cent in the year under review – from the sale of industrial
Director of the brand company STILL GmbH. He oversaw all
trucks. The product portfolio includes counterbalance trucks
cross-brand logistics activities and managed the intra-group
powered by an internal combustion engine or electric drive, ware-
logistics service provider, Urban. Before his departure from the
house technology (ride-on and hand-operated industrial trucks)
KION Group Executive Board, Mr Maurer was CEO and Labour
and towing vehicles for industrial applications. It covers all load
Relations Director of the brand company Linde Material Handling
capacities, from 1 tonne to 16 tonnes.
GmbH until his departure from the KION GROUP AG Executive
Worldwide research and development activities (R&D) enable
Board on 15 January 2015. He was also responsible for quality,
the KION Group to consolidate and extend its technology leader-
facility management and health, safety & environment (HSE).
ship. The Company plays a pioneering role in hydrostatic and
The Executive Board maintains a relationship of trust with,
diesel-electric drive systems and in innovative energy-efficient
and is monitored by, the Company’s Supervisory Board.
and low-emission drive technologies. As at the end of 2014, the
Supervisory Board
KION Group employed a total of 1,023 developers, of whom
282 worked in Asia. Total research and development spending
amounted to €119.7 million in the year under review. This corre-
The Supervisory Board, which was formed in accordance with
sponded to 2.6 per cent of consolidated revenue, putting the
the German Codetermination Act (MitbestG), comprises 16 people.
KION Group above the industry average. The focus of the Group’s
It advises the Executive Board in its handling of significant mat-
R&D activities is described in the ‘research and development’
ters and business transactions. To increase the efficiency of its
section.
work, the Supervisory Board is supported by four committees:
The KION Group operates a total of 14 production facilities
the Nomination Committee, the Executive Committee, the Audit
for industrial trucks and components in eight countries. Another
Committee and the Mediation Committee.
plant is currently being built in the Czech Republic, with produc-
Thilo Kämmerer stepped down as an employee representa-
tion due to start there in 2016. Owing to the particular require-
tive on the Supervisory Board with effect from 31 August 2014.
ments of its business, the KION Group manufactures major com-
He was replaced by Olaf Kunz on 1 September 2014. Ms Silke
ponents itself – notably lift masts, axles, counterweights and
Scheiber and Dr Martin Hintze stepped down from the Super-
safety equipment – in order to ensure security of supply and the
visory Board with effect from 1 January 2015. Ms Birgit Behrendt
availability of spare parts for important components. Other com-
and Ms Xu Ping were appointed to the Supervisory Board in
ponents – such as hydraulic components, electronic compo-
their place.
nents, rechargeable batteries, engine components and industrial
tyres – are purchased through the KION Group’s global procure-
ment organisation. > DIAGRAM 003
We keep the world moving.KION GROUP AG | Annual Report 2014 74
Production sites of the KION Group
DIAGRAM 003
K AHL
ASCHAFFENBURG
WEILBACH
HAMBURG
ČESK Ý KRUMLOV
GEISA
SUMMERVILLE
REUTLINGEN
CHÂTELLER AULT
LUZZ AR A
PUNE
JINGJIANG
XIAMEN
INDAIATUBA / SÃO PAULO
Linde Material Handling
Germany
STILL
Germany
Aschaffenburg: Counterbalance trucks with IC engine or electric
drive, warehouse technology
Hamburg: Counterbalance trucks with IC engine or electric drive,
warehouse technology, components
Weilbach: Component production
Reutlingen: Very narrow aisle trucks
Kahl: Spare parts warehouse, component production
Geisa: Component production
France
Italy
Châtellerault: Warehouse technology
Luzzara: Warehouse technology
Czech Republic
Brazil
Český Krumlov: Component production
United States
Summerville: Counterbalance trucks with IC engine or electric
drive, warehouse technology
Indaiatuba / São Paulo: Counterbalance trucks with IC engine,
warehouse technology
China
Xiamen: Counterbalance trucks with IC engine or electric drive,
heavy trucks, warehouse technology
Other (KION India)
India
Jingjiang: Counterbalance trucks with IC engine or electric drive,
warehouse technology
Pune: Counterbalance trucks with IC engine or electric drive, ware-
house technology
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
75
The KION Group offers customers tailor-made solutions and only
There are also individual orders for repairs and maintenance
makes trucks specifically to order. More than a third of new trucks
work as well as for spare parts. In addition, the KION Group looks
are fitted with technical components developed especially for a
after entire customer fleets, using special fleet management soft-
particular order. Advantages for customers in terms of total cost
ware to monitor the trucks in the fleets.
of ownership (TCO) underpin the Linde and STILL brands’ pre-
The brand companies also have extensive used truck and
mium positioning. The trucks’ hallmarks are cost-efficiency, high
rental truck businesses, allowing peaks in capacity requirements
productivity, comparatively low maintenance and high residual
to be met and customers to be supported after their leases have
values.
expired. Once a lease has expired, the used truck is serviced at a
The KION brand companies have an extensive sales and ser-
reconditioning centre and can then be rented on a flexible, short-
vice network comprising around 1,300 outlets staffed by more
term basis, for example. The used and rental truck business is
than 13,000 service employees in over 100 countries. Approxi-
integrated into the LMH and STILL segments in terms of its oper-
mately half of them are employed by the KION Group. In other
ations, and its fleet of well in excess of 50,000 trucks is financed
cases, the Company relies on external dealers. The sales net-
internally by Financial Services.
work in western Europe consists of exclusive dealers and Com-
pany-owned dealer ships. In China, Linde has built up a broad
network of more than 100 proprietary sales and service outlets.
Market and influencing factors
By contrast, distribution partners in Asia and South America usu-
ally offer more than one brand of truck.
Industrial trucks are deployed for a wide variety of applications.
The installed base, which comprised 1.2 million trucks
Material handling products are used for tasks such as loading
worldwide at the end of 2014, is a source of spare parts, main-
and unloading, linking production steps and moving pallets in
tenance and repair business within the KION Group’s integrated
logistics centres or in retail/wholesale operations. They therefore
business model.
form part of the production processes and supply chains of many
The service business – spare parts, rental and used trucks,
different industries around the world.
system and software solutions, and financial services – helps to
Measured in terms of unit sales of new trucks, the growth of
smooth out fluctuations in consolidated revenue and reduces
the market for industrial trucks has exceeded global economic
dependency on market cycles. In the reporting year, it con tributed
growth over the past ten years (2004 – 2014), rising at an average
45.9 per cent of consolidated revenue. This business also
of 4.5 per cent per year. However, it should be noted that these
strengthens customer relationships, thereby helping to generate
statistics do not include price effects or the contribution from the
sales of new trucks.
service business.
Financial services support new truck business in many mar-
The main growth driver across all regions is the advancing
kets, forming another pillar of the service business within the inte-
interconnectivity of the global economy, which requires additional
grated business model. Approximately 50 per cent of new truck
transport services between what are becoming increasingly frag-
business involves some form of financing via KION companies,
mented value chains and supply chains. The specialisation of
external banks or dealers. Offering finance is therefore part of the
companies and the growth of internet-based commerce are also
truck sales process, and end customer finance is generally linked
making logistics processes more segmented and more complex.
to a service contract throughout the term of the finance agree-
In regional terms, emerging markets – particularly China,
ment. In the main sales markets with a high volume of financing
eastern Europe, Central America and South America – are the
and leasing, financial services are handled by legally independent
major source of market growth. Demand for logistics services on
financial services companies. These include long-term leasing to
the back of increasing consumer spending is being fuelled by
customers and internal financing of the brand companies’ short-
expansion of industrial and public infrastructure as well as rising
term rental fleets.
living standards.
We keep the world moving.KION GROUP AG | Annual Report 2014 76
The lower (economy) and middle (volume) price segments are
Legal requirements also apply to the construction and oper-
growing at an above-average rate thanks to demand from emerg-
ation of production facilities, including in relation to air pollution
ing markets, where inexpensive industrial trucks are particularly
avoidance, noise reduction, waste production & disposal and
popular. Simple counterbalance trucks with an internal combus-
health & safety. Furthermore, the KION Group fulfils all of the legal
tion engine (diesel trucks) make up a comparatively high propor-
requirements pertaining to exports and financing business.
tion of the total volume in these markets. Above-average growth
opportunities are presented by eco-friendly, reliable diesel trucks
on the one hand and, on the other, counterbalance trucks with an
Market position
electric motor (electric forklift trucks) and warehouse technology.
In mature markets, where supply chains are highly sophisti-
The KION Group is one of the world’s leading manufacturers of
cated, the large number of trucks in use provides a strong base
industrial trucks. Measured in terms of units sold, it maintained its
for replacement business. A survey conducted by Peerless
leading position in western Europe in the year under review. It is
Research Group found that the majority of trucks are replaced
also one of the top players in eastern Europe, Brazil and India,
within ten years. The KION Group estimates that around
where one in four trucks sold now bears the name of a KION
90 per cent of sales in western Europe are currently accounted
brand. In China, the KION Group is among the leading non-
for by replacement investments. In highly developed economies,
domestic manufacturers, whereas it is still considered a niche
electric forklift trucks and warehouse technology, as well as
provider in the USA. The KION Group achieved a global market
diesel trucks in the premium price segment, make up the bulk of
share of 14.2 per cent in 2014 and therefore remained the
market volume.
second-largest supplier worldwide.
Measured in terms of units ordered, around 44 per cent of
the global market was attributable to diesel trucks in 2014, while
electric forklift trucks accounted for around 17 per cent and ware-
The segments and their products and services
house technology for 39 per cent. According to the KION Group’s
estimates, the premium price segment and the economy price
The KION Group is represented in the market by three global
segment each accounted for between 25 and 30 per cent of units
brands – Linde, STILL and Baoli – and three regional brands:
ordered. The remainder is accounted for by the volume price seg-
Fenwick (France), OM STILL (Italy) and Voltas MH (India). While
ment, making it the largest in terms of units sold.
the brand companies have full operational and commercial
Economic conditions in the different regions and the rates of
responsibility within their markets, KION GROUP AG is the stra-
growth in global trade are key influencing factors for the KION
tegic management holding company and is responsible for the
Group. Its financial situation is also affected by competition levels,
groupwide strategy and groupwide business standards.
exchange rates and changes in commodity prices.
> TABLE 012
The products and services of companies in the KION Group
also have to comply with specific legal requirements in their
respective markets. Compliance with the different requirements
has to be verified or certified. Many of the legal requirements are
enshrined in product-specific and other standards (e.g. EN, ISO
and DIN).
The tightening of emissions standards is not only taking
place in developed markets, it is also increasingly observable in
emerging markets such as China. This trend benefits the KION
Group with its high-tech products.
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
77
Segments 2014
in € million
LMH
STILL
Financial Services
Other
Consolidation / reconciliation
Total
Revenue
Adjusted EBIT ¹
Employees ²
2014
3,077.2
1,850.7
620.9
235.7
– 1,106.6
4,677.9
2013
2,881.1
1,717.5
539.4
235.1
– 878.5
4,494.6
2014
339.6
133.6
2.1
135.5
– 167.9
442.9
2013
309.1
123.9
0.7
73.5
– 90.6
416.5
2014
13,945
7,976
60
688
–
22,669
22,273
TABLE 012
2013
13,824
7,715
59
675
–
1 Adjusted for KION acquisition items and one-off items
2 Number of employees in full-time equivalents as at 31 December
For internal management purposes, the KION Group has divided
STILL segment
its business into operating segments that correspond to the
reportable segments, as required by international financial report-
The STILL and OM STILL brands are grouped in the STILL seg-
ing standards (IFRS 8).
ment. STILL is predominantly a global premium provider of trucks
with electric and diesel-electric drives. It mainly focuses on the
Linde Material Handling (LMH) segment
European and Latin American markets, with the regional brand
OM STILL serving the Italian market.
The Linde Material Handling (LMH) segment encompasses the
The segment’s portfolio consists of forklift trucks and ware-
Linde, Fenwick and Baoli brands.
house trucks plus associated services. STILL has also positioned
Linde is a global premium brand and a technology leader.
itself as a leading provider of intelligent intralogistics solutions,
Among its other selling points, it has decades of experience with
offering trucks and fully integrated warehouse systems, including
hydrostatic drive technology and meets customers’ highest
automation and fleet management solutions.
requirements regarding technology, efficiency, functionality and
design. The product portfolio ranges from warehouse trucks to
Financial Services (FS) segment
heavy trucks and caters to all of the major application areas.
Linde has been developing and manufacturing electric drive
The Financial Services (FS) segment is an internal financing part-
systems for decades and uses the resulting expertise in a variety
ner for LMH and STILL, providing finance solutions that promote
of applications. In France, Linde products are sold under the
sales. Its activities comprise the financing of long-term leasing
Fenwick brand.
business for external customers of the KION Group, the internal
Baoli is the global brand for the economy segment. Building
financing of the short-term rental business of the LMH and STILL
on its base in China and other growth markets in Asia, it has
operating segments, and the related risk management. In the
established sales structures in Europe, Central America and
large sales markets with a high volume of financing and leasing,
South America.
legally independent FS companies handle this business.
We keep the world moving.KION GROUP AG | Annual Report 2014 78
When long-term leasing business is being conducted, FS itself
acts as the contractual partner to external customers and offers
STRATEGY OF THE KION GROUP
various financing models.
Operational responsibility for the short-term rental business
(short-term rental fleet) lies with the LMH and STILL brand seg-
Objectives of the Strategy 2020
ments. FS acts as the contractual partner to the brand segments,
providing the internal financing for this short-term rental fleet.
The KION Group presented its Strategy 2020 in March 2014,
FS refinances both long-term leasing with end customers
clearly setting out its goals for the next few years:
and the short-term rental fleet, mostly on the basis of sale and
leaseback agreements.
In addition, a substantial portion of sales financing for exter-
– Growth: The KION Group wants to accelerate its growth
and close the gap to the global market leader by 2020. To
nal customers is offered indirectly, with an external leasing com-
this end, it is strengthening its leading positions in the Euro-
pany to which the business is referred by the KION Group acting
pean and Brazilian markets so that it can go on to capture
as lessor rather than the KION Group. The financial services pro-
additional market share in growth markets, particularly
vider purchases the truck from the KION Group and provides the
those in Asia and North America. This growth is to be
financing to the end customer. The KION Group carries out the
accompanied by a far greater presence in the largest price
majority of the servicing for the truck and, once the financing has
segment (volume).
expired, may also take on its reconditioning and remarketing.
Other segment
– Profitability: The KION Group aims to further improve its EBIT
margin in order to expand its position as the most profitable
supplier in the market. It has therefore set a target of a sus-
The Other segment mainly comprises holding companies and
tained EBIT margin of above 10 per cent. This requires not
service companies, the latter providing cross-segment services
only an increase in the gross margin but also strict control of
such as IT and logistics. In the reporting year, the subsidiary KION
fixed costs.
India (formerly Voltas Material Handling Pvt. Ltd.) also belonged to
this segment. KION India manufactures diesel trucks, electric
forklift trucks and warehouse trucks for the Indian market under
– Efficient use of capital: The KION Group is working stead-
fastly to optimise the return on capital employed (ROCE).
the Voltas brand. It has a network of more than 60 branches and
Besides increasing earnings, the focus here is on managing
dealers providing sales and service.
assets and finance.
– Resilience: The KION Group aims to improve its ability to
cope with economic downturns. It is therefore stepping up
efforts to diversify its business in terms of regions and cus-
tomer sectors alongside its initiatives to optimise the produc-
tion network and expand the service business.
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
79
Strategic focus areas of the Strategy 2020
industrial trucks as part of Industry 4.0 scenarios (see ‘research
The Strategy 2020 essentially encompasses six closely related
areas of focus.
Multi-brand strategy
and development’).
Global production network
The KION Group wants to build its industrial trucks close to the
markets in which they will be sold. To this end, production facil-
The starting point is the further development of the successful
ities worldwide are being efficiently integrated – utilising econo-
multi-brand strategy, coupled with greater differentiation within it.
mies of scale and ensuring a high level of capacity utilisation. A
The premium brands, Linde and STILL, are to consolidate their
programme of capital expenditure is aimed not only at updating
presence at the upper end of the volume segment on the basis of
and expanding existing plants but also at establishing factories
the platform strategy (see below), particularly in North America
in new locations.
and the emerging markets. As the global brand for the economy
The core element in western Europe is the modernisation of
segment, Baoli is to gain a foothold at the lower end of the volume
the plants in Aschaffenburg (Linde) and Hamburg (STILL), with a
segment with a tailored product and sales strategy. In future, all
clear focus on increasing capacity, improving processes and
three global brands – Linde, STILL and Baoli – will be represented
containing costs. Approximately €83 million will be made availa-
in these regions and cater to all price segments.
ble for these projects between now and 2021. Both sites will col-
laborate closely with the new plant in Stříbro, near Plzeň in the
Global modular and platform strategy
Czech Republic. The ground-breaking ceremony for the new fac-
Further development of the multi-brand strategy requires the
tory was held in November 2014. Due to open in 2016, it will ini-
product portfolio to be managed end to end on the basis of a
tially produce warehouse trucks currently manufactured in
global modular and platform strategy. For this reason, a Prod-
Aschaffenburg. Capital expenditure on this undertaking amounts
uct & Module Committee was formed in the reporting year. The
to approximately €12 million. At the same time, capacity is to be
KION Group will establish shared, cross-brand and cost-effi-
significantly increased and processes optimised at sites in
cient platforms for product development and production that are
China (Xiamen and Jingjiang), the USA (Summerville) and Brazil
geared to the volume and economy segments outside western
(São Paulo).
Europe. However, market success depends on these platforms
In October 2013, small-scale production of heavy trucks was
allowing a strong degree of regional differentiation in the industrial
ended at a dedicated production site in Wales and transferred to
trucks. One example is Baoli’s diesel truck platform, which is
a contract manufacturing facility in the Czech Republic. The
used for region-specific trucks in India (Voltas) and Brazil (STILL).
winding-up of the former production site was completed in the
The global deployment of platforms is managed by the research
reporting year.
and development centre in Xiamen, China, wich was significantly
expanded in 2014.
Regional growth strategies
In western Europe, the premium brands, Linde and STILL,
Having enhanced its multi-brand strategy and its modular and plat-
will continue to use different platforms in order to maintain the
form strategy, as well as increasing integration between the sites in
defining characteristics of their brands, but will increasingly
its production network, the KION Group has put everything in
deploy shared modules. Innovation underpins the premium posi-
place to increase its market share in strategically important regions.
tioning of the two brands. Currently, the focus is on optimising
In North America, one of the largest markets for industrial
lithium-ion batteries for electric and hybrid trucks, which are
trucks, the KION Group aims to move from being a niche provider
superior to lead-acid batteries in many regards. The first models
to a major market player offering a full portfolio of products by
were launched on the market in October 2014. Sales in the pre-
2020. This will enable it to capture an increasing share of this
mium segment are also boosted by innovative intralogistics
growing market. As part of the new multi-brand approach, Linde
solutions, such as fleet data management and automated
North America was renamed KION North America in November
We keep the world moving.KION GROUP AG | Annual Report 2014 80
2014. The plant in Summerville is to be expanded so that it can
Strategy for back-office functions
start manufacturing IC trucks, electric forklift trucks and ware-
In addition, the KION Group is aligning its groupwide back-office
house technology. The region-specific con figuration of the plat-
services to the growing requirements of the global organisation in
form products is especially important here. Particular emphasis will
order to leverage economies of scale and synergies. For example,
be placed on the volume market, which is very well developed in
KION Group IT – a global shared services organisation with four
North America. As well as expanding the range of products, KION
functions: IT governance, key account management, application
North America is also strengthening its sales and service network.
services and infrastructure services – will focus even more on
New products for the volume segment are aimed at increas-
increasing its contribution to the success of the Company and on
ing market share in the fast-growing markets of Asia. They are
providing cost-efficient and reliable IT services.
based on the economy product platform developed by Baoli.
Strategy for aftersales and service business
The strategy for the aftersales business is designed to unlock
more of the potential offered by the installed base, which is
expanding worldwide. This will help to boost revenue. The KION
Group is continually extending its portfolio of services and
improving their quality at every stage of the product lifecycle.
Because the premium segment is already well covered, the focus
is on expanding sales and service structures in the economy and
volume markets. Financial services are also a key component of
the service portfolio as they support the KION Group’s core
industrial business. The Company also intends to increase its
market share by, for example, opening additional service outlets
in attractive growth markets and stepping up the short-term
rental business.
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Fundamentals of the KION Group
81
MANAGEMENT SYSTEM
Core key performance indicators
The KION Group’s strategy, which centres on value and growth,
is reflected in how the Company is managed. It uses four core key
performance indicators (KPIs) to continuously monitor market
success, profitability, financial strength and liquidity. The perfor-
mance targets of the Group and the segments are based on
selected financial KPIs, as is the performance-based remunera-
tion paid to managers. Each month, the KPIs are measured and
made available to the Executive Board in a comprehensive report.
This enables the management team to take prompt corrective
action in the event of variances compared with target figures.
> TABLE 013
Key performance indicators
TABLE 013
in € million
2014
2013
2012 *
Order intake
Revenue
Adjusted EBIT ¹
Free cash flow ²
4,877.3
4,489.1
4,590.3
4,677.9
4,494.6
4,559.8
442.9
416.5
408.3
305.9
195.6
513.6
* Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011);
Order intake, Revenue and Adjusted EBIT were aligned due to the sale of the Hydraulics Business
1 Adjusted for KION acquisition items and one-off items
2 Last year's figures were adjusted due to a change in presentation, for details see ‘Other disclosures on Consolidated statement of cash flows’
We keep the world moving.KION GROUP AG | Annual Report 2014 82
KPIs related to business volume
Other key performance indicators
Order intake and revenue
Besides the aforementioned core KPIs, the KION Group uses a
Order intake and revenue are broken down by region, segment
wealth of additional financial KPIs. The main ones are net debt,
and product category in the KION Group’s management report-
which is used to manage the capital structure, as well as the EBIT
ing so that growth drivers and pertinent trends can be identified
margin and return on capital employed (ROCE), which form the
and analysed at an early stage. Order intake is a leading indicator
basis for a component of remuneration and are defined as targets
for revenue. The length of time between receipt and invoicing of
in the Strategy 2020. There are also non-financial KPIs, which
an order varies between business units and product groups.
primarily relate to customers, employees, sustainability and tech-
nology. Some of them are used operationally as leading indica-
Earnings-related KPI
tors for the financial KPIs.
Adjusted EBIT
The KPIs used to manage the brand segments are order
intake, revenue and adjusted EBIT. Earnings before tax (EBT) and
The key figure used for operational management and analysis of
return on equity (ROE) are the KPIs used to manage the Financial
the KION Group’s financial performance is adjusted earnings
Services segment.
before interest and tax (EBIT). It is calculated in the same way as
EBIT, except that it does not take account of the KION Group
purchase price allocation or any non-recurring items.
Liquidity-related KPI
Free cash flow
Free cash flow is the main KPI for managing leverage and liquidity.
It is determined by the KION Group’s operating activities and
investing activities. Free cash flow does not include interest
arising from financing activities. Carefully targeted management
of working capital and detailed planning of capital expenditure are
used to help in controlling the level of free cash flow.
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Report on the economic position
83
Report on the economic position
MACROECONOMIC AND
SECTOR-SPECIFIC CONDITIONS
Macroeconomic conditions
In South America, the main factor acting as a brake on
growth other than the fall in commodity prices was the political
uncertainty in individual countries. Brazil, the largest economy in
Latin America, entered recession in the first half of the year and
ended 2014 with close to zero growth for the year as a whole.
Growth across eastern Europe was uneven and overall not as
strong as in 2013. The economies of Poland and the Czech
In 2014, growth in the global economy was less dynamic than
Republic enjoyed growth, whereas the Russian economy con-
anticipated, remaining almost unchanged from 2013. Adverse
tracted significantly as a consequence of the sanctions imposed
factors included the greater geopolitical risks caused by the con-
in connection with the crisis in Ukraine and as a result of the steep
flicts in Ukraine and the Middle East, plus resurgent uncertainty in
drop in the value of the rouble and the persistently low price of oil.
the financial markets.
On balance, the industrialised nations achieved a somewhat
Another noticeable feature was the muted growth in emerg-
higher level of growth than in 2013, but likewise still fell short of
ing markets, which were unable to build overall on the growth
expectations. Economic recovery in the eurozone was particularly
rates achieved in 2013. The weaker pace of growth in China led
disappointing with unexpectedly weak growth in Germany com-
to a drop in demand from key trading partners, even though the
pounding the impact from the recession in Italy and stagnation in
shift towards a sustainable growth trajectory can be seen as a
France. In contrast, the picture in the United Kingdom was positive,
positive development over the longer term. Growth rates in the
boosted by higher consumer spending and stronger growth in ser-
other newly industrialising countries in Asia were sound but nev-
vices, a key sector of the economy. In the US, the growth rate
ertheless still down year on year on average, although India man-
almost exceeded that achieved in 2013, with both consumer
aged to increase its growth rate again.
spending and corporate capital investment rising substantially dur-
ing the course of the year.
DIAGRAM 004
7.4%
5.3%
Gross domestic product in 2014 – real year-on-year change
CHINA
INDIA
WORLD
UNITED STATES
GERMANY
EU
RUSSIA
BRAZIL
0.1%
JAPAN
0.1%
2.6%
2.4%
1.5%
1.4%
0.6%
Source: Oxford Economics (as at 16 January 2015)
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
We keep the world moving.KION GROUP AG | Annual Report 2014 84
Demand for industrial trucks is primarily driven by investment
house technology products also increased significantly by
confidence and world trade volumes as well as GDP growth. The
10.8 per cent but unit sales of IC trucks failed to match the 2013
increase in spending on capital equipment was spread unevenly
growth rate, achieving a rise of just 3.5 per cent.
around the globe, reflecting the varying rates of market growth.
Most of the growth in unit sales was accounted for by west-
Whereas the US saw a considerable rise in this spending, busi-
ern Europe (up by 11.5 per cent), China (up by 10.2 per cent) and
nesses in the eurozone, including Germany in particular, remained
North America (up by 9.2 per cent). The western European mar-
noticeably reticent. Over the whole of 2014, the expansion in
ket therefore rallied significantly following the stagnation in 2013
global trade was weaker than anticipated and once again fell
(0.3 per cent growth), the principal growth drivers in this case
short of the long-term trend. The growth in imports and exports
being pent-up demand (primarily in southern European markets)
in the emerging markets was more subdued than in 2013.
and, at a more structural level, the replacement of old trucks. Ger-
Sectoral conditions
Sales markets
many, the largest single market in western Europe, gained
10.3 per cent and was therefore almost at the western European
average. Growth in Spain (up by 42.6 per cent), the United King-
dom (up by 12.6 per cent) and Italy (up by 15.7 per cent) was more
rapid than in other neighbouring European countries, but there
was hardly any gain in the French market at all.
In 2014, the global market for industrial trucks hit a new record
In overall terms, the eastern European market flatlined (down
level of almost 1.1 million vehicles ordered, with even stronger
by 0.7 per cent). The significant drop in unit sales in Russia (down
market growth than in 2013. Across all regions and product
by 19.2 per cent) was almost offset by gains elsewhere, particu-
types, the number of new trucks ordered was up by 7.8 per cent
larly higher sales figures in Poland, the Czech Republic and in
(2013: 6.9 per cent). The sharpest upturn was in the sales figures
Hungary.
for electric forklift trucks (up by 13.3 per cent), an area of business
As in 2013, China notched up double-digit growth (10.2 per
that had lagged behind the overall market in 2013. Sales of ware-
cent), the main impetus coming from electric forklift trucks and
Global industrial truck market (order intake)
in thousand units
Western Europe
Eastern Europe
North America
Central & South America
Asia (excl. Japan)
Rest of world
World
Source: WITS/FEM
2014
289.2
57.6
219.5
48.5
357.5
119.0
2013
259.4
58.0
201.0
52.3
327.0
114.5
1,091.3
1,012.2
TABLE 014
Change
11.5%
– 0.7%
9.2%
– 7.3%
9.3%
4.0%
7.8%
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Report on the economic position
85
warehouse technology equipment. In contrast, the total number
Financial markets
of units sold in Brazil, the largest single market in South America,
fell by 13.0 per cent. > TABLE 014
The KION Group bills the bulk of its revenue in euros; the propor-
Procurement markets
tion was 62.8 per cent in 2014 and was therefore unchanged com-
pared with 2013. The remainder is billed in foreign currencies,
notably the Chinese renminbi, pound sterling and the Brazilian real.
Commodity prices continue to have a direct impact on approxi-
In the first half of 2014, the strong euro combined with the
mately one quarter of the cost of the materials needed to manu-
devaluation of currencies in relevant emerging markets had a neg-
facture an industrial truck in the KION Group.
ative impact on the KION Group's order intake. In the second half
The average price over the year for steel, the most important
of the year, however, the euro weakened as the monetary policy
commodity, fell compared with 2013 owing to the persistently
of the European Central Bank (ECB) became increasingly expan-
modest level of economic growth. Manufacturing costs are also
sionary and the currency fell against other key reserve currencies.
influenced to a lesser extent by the prices for copper and rubber,
Over the year, the euro fell by approximately 10 per cent
which were also down year on year. The price of oil, a useful price
against the Chinese renminbi but the average exchange rate for
indicator for plastic products, fell markedly during the second half
the year remained largely around the level of 2013. The pound
of the year and overall was below the average for 2013.
sterling strengthened by approximately 5 per cent on average in
On the other hand, however, higher payroll and ancillary
2014 whereas the Brazilian real lost further ground (down by
wage costs had an adverse impact on unit costs. In overall terms,
around 9 per cent) despite the weakness of the euro. All things
producer prices for input goods in the eurozone only fell by a neg-
considered, changes in exchange rates only had a slight negative
ligible amount.
effect on the KION Group's order intake, revenue and profits.
> TABLE 015
Currencies
Average rate per Euro
Australia (AUD)
Brazil (BRL)
Switzerland (CHF)
China (CNY)
United Kingdom (GBP)
Russia (RUB)
U.S.A. (USD)
Source: Reuters
TABLE 015
2013
1.38
2.87
1.23
8.17
0.85
42.33
1.33
2014
1.47
3.12
1.21
8.19
0.81
50.92
1.33
We keep the world moving.KION GROUP AG | Annual Report 2014 86
Business performance
On 15 April 2014, the KION Group repaid early and in full the
fixed-rate tranche of the corporate bond issued in 2011, which
was due to mature in 2018 and had a volume of €325.0 million,
FINANCIAL POSITION AND
FINANCIAL PERFORMANCE
and the floating-rate tranche of the corporate bond issued in
Overall assessment of the economic situation
2013, which was due to mature in 2020 and had a volume of
€200.0 million. An amount of €8.4 million representing the pro-
The year under review was the KION Group's most successful
rata deferred borrowing costs and a payment of €14.8 million rep-
year to date. Following flat revenue growth in the first half of the
resenting early repayment charges were recognised as financial
year, the Group was able to generate significant gains over the
expenses. The funds used for the repayment mainly originated
rest of the year, increasing revenue by 4.1 per cent to €4,677.9 mil-
from a revolving credit facility, which has a term to maturity of five
lion over the year as a whole. Thanks to a strong final quarter, rev-
years after the IPO in June 2013. This credit facility currently has
enue from new trucks business reached the 2013 level, but ser-
lower interest rates than the two corporate bonds.
vice business was up by 8.6 per cent, a considerable year-on-year
Against this background, the revolving credit facility was
gain which made a substantial contribution to the strong revenue
increased by €198.0 million to a total of €1,243.0 million in April
growth at Group level.
2014 on the basis of bilateral lending agreements with a group of
The encouraging rise in order intake of 8.6 per cent or €388.1
banks. These additional loans mature in April 2019 and have a
million was attributable to the successful sales activities in the
variable interest rate.
two operating brand segments. At the same time, the 13.5 per
On 7 April 2014, Moody's raised the rating of the KION Group
cent rise in the order book (€787.2 million) represents a good
and the bonds from Ba3 to Ba2 with a stable outlook. Then, on
starting position for 2015. Based on an 8.5 per cent increase in
15 April 2014, Standard & Poor’s raised its rating for the KION
units ordered, the KION Group outperformed the global market in
Group from BB– to BB, retaining the positive outlook.
terms of growth and consolidated its position as the second-larg-
On 1 October 2014, the Executive Board of KION GROUP AG
est provider worldwide. One of the contributing factors in this
approved the introduction of a share option programme for
regard was the targeted expansion of the international business
employees in Germany and the issue of an offer as part of this
beneath the premium segment.
share option programme. The offer deadline for eligible employ-
EBIT, adjusted for non-recurring items, came to €442.9 mil-
ees was 31 October 2014.
lion, a year-on-year increase of 6.3 per cent. The adjusted EBIT
The KION Group sold its indirect controlling interest in Willen-
margin improved from 9.3 per cent in 2013 to 9.5 per cent in the
brock Arbeitsbühnen GmbH & Co. KG (referred to below as Willen-
reporting period.
brock Arbeitsbühnen) in full with effect from 16 December 2014.
The further optimisation of the funding structure in the year
under review was reflected in the significant decline in financial
expenses. Despite non-recurring expenses in connection with the
early redemption of two corporate bond tranches, the Group more
than halved the interest expenses on loan obligations and capital
market liabilities. In total, the KION Group generated net income
for the year of €178.2 million. The earnings per share attributable
to the shareholders in the KION Group amounted to €1.79. KION
GROUP AG will propose a dividend of €0.55 per share to the
Annual General Meeting, €0.20 per share more than in 2013.
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Report on the economic position
87
The KION Group is well positioned to use its own resources over
In the reporting year, high-growth markets accounted for some
the next years to fund and implement the action necessary as
35 per cent of new truck orders, driven in the main by growth in
part of its Strategy 2020. The aim of this strategy is to enable the
eastern Europe and China.
Group to catch up with the global market leader within five years.
Factors contributing to the rise in order intake in terms of value
Comparison between actual
and forecast growth
included the higher unit sales of vehicles, the further slight increase
in the proportion of customised equipment and the expansion of
the service business. Over the course of 2014, the order book
increased by 13.5 per cent to €787.2 million (2013: €693.3 million).
In the past year, the KION Group was consistently able to fulfil,
Revenue
and in some cases even exceed, the forecasts for 2014 specified
in the outlook section of the 2013 group management report. For
Revenue in the KION Group amounted to €4,677.9 million, an
example, in the case of order intake, the Group was able to
increase of 4.1 per cent on the 2013 figure of €4,494.6 million. After
exceed the slight increase forecast for the year. As for consoli-
a subdued start to the year, revenue growth gathered pace mark-
dated revenue, the actual year-on-year increase was in line with
edly with the Group generating an 8.2 per cent increase in revenue
the anticipated slight increase in this figure and the Group cer-
in the second half of the year. The LMH and STILL brand segments
tainly achieved the significant rise in adjusted EBIT expected for
both shared in the growth. The acquisition of the majority stakes in
the year. In the case of free cash flow, the KION Group managed
the dealers Arser (August 2013) and Willenbrock (end of 2013) also
to exceed the substantial forecast increase. The funds generated
contributed to the improved consolidated revenue, although the
as a result were used to bring down borrowing, enabling the
restructuring of the heavy truck business did lead to a modest loss
Group to markedly reduce its net debt in the year under review.
of revenue.
Business situation and financial performance
of the KION Group
Level of orders
Revenue by product category
The trend in new trucks business in the second half of the year
was encouraging. The Group was able to make up for the deficit
in the first six months of the year in full, so that ultimately the rev-
enue for the year amounted to €2,533.0 million, which was actu-
Order intake totalled €4,877.3 million, exceeding the 2013 level of
ally slightly higher than the prior-year figure of €2,519.6 million.
€4,489.1 million by 8.6 per cent. The LMH and STILL operating
Higher unit sales of warehouse technology products and electric
segments contributed to this rise, both accelerating their rate of
forklift trucks more than offset the slight drop in revenue from die-
growth over the course of year.
sel trucks and the negative impact from the heavy truck business.
The KION Group brand companies increased orders for new
In the service business, the KION Group generated a signifi-
trucks by 8.5 per cent to 155.0 thousand units. In the case of die-
cant increase in revenue of 8.6 per cent to €2,144.9 million (2013:
sel trucks, the KION Group generated slight growth and main-
€1,975.0 million). This substantial rise was partly attributable to
tained its share of the global market. A noticeable feature was the
the dealer Willenbrock, in which the KION Group had acquired a
demand for Baoli's D series trucks in emerging markets. The
majority stake. There were increases in revenue from the spare-
KION Group benefited from growth in the market for electric fork-
parts business and from servicing and maintenance work. The
lift trucks and warehouse technology products, responding in
rental business and the used truck business also registered sig-
particular to the rising demand in western Europe and China.
nificant year-on-year gains. The proportion of the KION Group’s
total revenue generated by the service business grew to 45.9 per
cent (2013: 43.9 per cent). > TABLE 016
We keep the world moving.KION GROUP AG | Annual Report 2014 88
Revenue by product category
in € million
New business
Service offering
– Aftersales
– Rental business
– Used trucks
– Other
Total
2014
2,533.0
2,144.9
1,250.4
486.9
264.9
142.7
2013
2,519.6
1,975.0
1,174.2
443.1
226.4
131.3
4,677.9
4,494.6
TABLE 016
Change
0.5%
8.6%
6.5%
9.9%
17.0%
8.7%
4.1%
Revenue by customer location
Republic and the Group therefore did not feel an impact from
the loss of revenue in Russia and Ukraine as a consequence of
In western Europe, the KION Group increased revenue appreci-
the geopolitical situation there. In Brazil, the KION Group was
ably and made up in full for the loss of revenue incurred in 2013.
unable to escape the effects from the negative trends in the
Significant gains in Germany, Italy and the United Kingdom
market, but revenue in Asia was slightly up year on year. Of the
more than compensated for a drop in revenue in other areas,
total consolidated revenue, 73.9 per cent was generated out-
notably France. Strong growth in eastern Europe was based pri-
side Germany, with growth markets accounting for 24.8 per
marily on the expansion of business in Poland and the Czech
cent (2013: 25.3 per cent). > TABLE 017
Revenue by customer location
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
Total revenue
2014
3,411.0
403.3
245.3
470.7
147.5
2013
3,223.9
369.7
279.4
453.5
168.1
4,677.9
4,494.6
TABLE 017
Change
5.8%
9.1%
– 12.2%
3.8%
– 12.2%
4.1%
We keep the world moving.KION GROUP AG | Annual Report 2014
GROUP MANAGEMENT REPORT
Report on the economic position
89
Earnings
EBIT and EBITDA
Hydraulics GmbH & Co. KG (referred to below as Linde Hydrau-
lics), which had become necessary because of the downturn in
the business performance of Linde Hydraulics. EBIT for the KION
The Group improved earnings before interest and tax (EBIT),
Group was also adversely impacted by the earnings and the pro
adjusted for KION acquisition items and non-recurring items, to
rata purchase-price-related non-operating effects on earnings
€442.9 million, an increase of 6.3 per cent compared with 2013
from Linde Hydraulics. Overall, the non-cash effects from Linde
(€416.5 million). The higher administrative expenses since the IPO
Hydraulics came to a total loss of €33.9 million, which was recog-
and the higher IT costs in connection with the infrastructure
nised under share of profit (loss) of equity-accounted investments.
changes throughout the Group were more than offset by the
Other material non-recurring items included non-recurring admin-
higher gross profit. The adjusted EBIT margin improved from
istrative expenses in connection with the growth strategy and
9.3 per cent in 2013 to 9.5 per cent in the reporting period.
expenses arising from the early termination of service contracts for
EBIT including KION acquisition items and non-recurring
members of the Executive Board. In addition to depreciation/amor-
items amounted to €347.0 million (2013: €374.2 million). This
tisation, earnings-related items from the KION acquisition also
decline was largely attributable to the recognition of an impair-
included significant expenses arising from the disposal of assets
ment loss related to the 30 per cent equity investment in Linde
amounting to €10.7 million (2013: €0.4 million). > TABLE 018
EBIT
in € million
Net income
Income taxes
Net financial expenses
EBIT
+ Non-recurring items
+ KION acquisition items
Adjusted EBIT
2014
178.2
– 80.0
– 88.8
347.0
57.0
38.9
442.9
2013
138.4
– 15.9
– 219.8
374.2
12.8
29.5
416.5
TABLE 018
Change
28.8%
<– 100.0%
59.6%
– 7.2%
> 100.0%
31.6%
6.3%
We keep the world moving.KION GROUP AG | Annual Report 2014
90
EBITDA
in € million
EBIT
Amortisation and depreciation
EBITDA
+ Non-recurring items
+ KION acquisition items
Adjusted EBITDA
2014
347.0
367.2
714.2
55.6
10.7
780.4
2013
374.2
334.6
708.8
12.3
0.4
721.5
TABLE 019
Change
– 7.2%
9.7%
0.8%
> 100.0%
> 100.0%
8.2%
EBITDA amounted to €714.2 million and was therefore close to
The 'other' item amounting to €26.4 million accounted for a
the equivalent figure in 2013 (€708.8 million). In contrast, adjusted
much smaller proportion of net income than in 2013 (€76.6 mil-
EBITDA rose significantly to €780.4 million (2013: €721.5 million).
lion). In particular, the share of profit (loss) of equity-accounted
As a consequence, the adjusted EBITDA margin improved from
investments reported under 'other' went from a share of profit of
16.1 per cent to 16.7 per cent. > TABLE 019
€1.7 million in 2013 to an overall share of loss of €24.8 million in
the year under review. The negative amount arose primarily from
Key influencing factors for earnings
Linde Hydraulics (loss of €33.9 million); some of this loss was off-
Compared with the rise in revenue, there was a disproportionately
set by a total share of profit of €9.1 million from the other equi-
low year-on-year increase of 2.5 per cent in the cost of sales to
ty-accounted investments. > TABLE 020
€3,337.4 million (2013: €3,255.2 million). Gross profit therefore
improved by 8.2 per cent to €1,340.5 million (2013: €1,239.4 mil-
Net financial income/expenses
lion) and the gross margin improved from 27.6 per cent to 28.7 per
cent. One of the main factors behind this improvement in margin
The change in the balance of financial income and financial
was the greater proportion of revenue accounted for by the
expenses reflected the much improved funding structure resulting
high-margin service business. In addition, the new trucks busi-
from the IPO and the subsequent redemption of financial liabilities.
ness benefited from a better margin based on the high proportion
Net financial expenses amounted to just €88.8 million, less than
of customised equipment.
half of the net financial expenses in 2013 (€219.8 million). The net
Selling expenses went up by €32.3 million year on year, for
financial expenses for the year under review included significant
the most part because the dealers Willenbrock and Arser were
effects from two non-recurring items. Firstly, the early redemption
consolidated for the first time for the whole of the year. Trade fair
of two corporate bond tranches in the second quarter of 2014 gave
participation expenses incurred by LMH and STILL also had an
rise to non-recurring financial expenses of €23.2 million. This
impact. One of the causes of the rise in R&D costs was the devel-
amount comprised pro-rata borrowing costs of €8.4 million and
opment of platform concepts. The rise of 11.6 per cent in admin-
early-redemption charges of €14.8 million. The second non-recur-
istrative expenses to €323.6 million (2013: €290.0 million) was
ring item was financial income amounting to €43.2 million from the
attributable to the enhanced requirements associated with the
measurement of the put option held by Linde Material Handling
IPO, salary increases and the early termination of service con-
GmbH and the two call options held by Weichai Power relating to
tracts for members of the Executive Board.
shares in Linde Hydraulics. The net financial expenses in 2013 also
included non-recurring expense items arising from capitalised
We keep the world moving.KION GROUP AG | Annual Report 2014
GROUP MANAGEMENT REPORT
Report on the economic position
91
(Condensed) income statement
in € million
Revenue
Cost of sales
Gross profit
Selling expenses
Research and development costs
Administrative expenses
Other
Earnings before interest and taxes (EBIT)
Net financial expenses
Earnings before taxes
Income taxes
Net income
2014
4,677.9
2013
4,494.6
– 3,337.4
– 3,255.2
1,340.5
– 570.5
– 125.7
– 323.6
26.4
347.0
– 88.8
258.3
– 80.0
178.2
1,239.4
– 538.2
– 113.6
– 290.0
76.6
374.2
– 219.8
154.3
– 15.9
138.4
TABLE 020
Change
4.1%
– 2.5%
8.2%
– 6.0%
– 10.6%
– 11.6%
– 65.6%
– 7.2%
59.6%
67.4%
<– 100.0%
28.8%
borrowing costs (€24.5 million), the termination of interest-rate
Net income and appropriation of profit
hedges (€18.3 million) and from the remeasurement of the Linde
The KION Group generated net income of €178.2 million in 2014,
Hydraulics options (€14.7 million). Adjusted for these non-recurring
a year-on-year increase of €39.8 million (2013: €138.4 million).
items, net financial expenses in 2014 amounted to €108.8 million, a
The decline in EBIT and the higher tax expense were offset by the
significant improvement on the adjusted net financial expenses in
significant improvement in net financial expenses. Net income of
2013 totalling €162.4 million.
€176.7 million (2013: €138.8 million) was attributable to the share-
Income taxes
holders of KION GROUP AG. Basic and diluted earnings per
share came to €1.79 (2013: €1.69) based on an average number
Income tax expenses amounted to €80.0 million. The tax rate
of no-par-value shares in the year of 98.7 million (2013: 82.0 mil-
therefore increased to 31.0 per cent compared with the unusually
lion). This did not include 163,562 no-par-value treasury shares
low rate of 10.3 per cent in 2013. The low tax expense in 2013 was
that were repurchased by KION GROUP AG as part of a buy-
primarily attributable to the recognition of deferred tax assets
back to support the KION Employee Equity Programme.
related to loss carryforwards and interest carryforwards that were
The Executive Board and Supervisory Board of KION
only able to be utilised after KION Material Handling GmbH and
GROUP AG will propose a dividend of €0.55 per share to the
Linde Material Handling GmbH had entered into a profit-and-loss
Annual General Meeting on 12 May 2015. This equates to a total
transfer agreement. In contrast, a deferred tax expense of €16.5
dividend payout of €54.3 million based on 98,736,438 divi-
million arose in 2014 (2013: deferred tax income of €43.1 million),
dend-bearing shares on the reporting date of 31 December 2014.
attributable mainly to the utilisation of loss carryforwards and inter-
Approximately 31 per cent of the net income attributable to the
est carryforwards in Germany. The current income tax expense
shareholders in KION GROUP AG will therefore be distributed in
compared with 2013 was accounted for, in particular, by the
dividends.
improved net income before tax in individual foreign companies.
We keep the world moving.KION GROUP AG | Annual Report 2014
92
Business situation and financial performance
of the segments
LMH segment
In 2014, LMH put in place the basis for Strategy 2020, pre-
paring for the comprehensive modernisation of its Aschaffenburg
facility and the construction of a new plant in the Czech Republic.
Further activities included the design of the product and sales
offensive in North America and the expansion of the sales and
Business performance and order intake
service network for all three brand companies in the segment:
The Linde Material Handling segment reported a significant
Linde, Baoli and Fenwick. The realignment of the heavy trucks
increase in orders and revenue, consolidating its position as one
business was also completed in the year under review.
of the leading global manufacturers and the market leader in
Europe. Order intake rose to €3,234.4 million, an increase of
Revenue
11.5 per cent on the 2013 figure of €2,901.8 million, and thereby
The LMH segment improved revenue by 6.8 per cent to
exceeded the €3 billion mark for the first time. Measured on the
€3,077.2 million (2013: €2,881.1 million). There were particularly
basis of the number of vehicles ordered, LMH and its brand com-
strong gains in the service and spare-parts business, the rental
panies were able to defend their market position in western
business and the used trucks business. A significant contribution
Europe and in Asia, and expand in eastern Europe. In the case of
to revenue came from the full-year consolidation of the dealer
counterbalance trucks and warehouse trucks, LMH visibly out-
Willenbrock. LMH generated a noticeable upturn in revenue from
performed the global market in terms of growth. Contributing fac-
new trucks, driven primarily by greater unit sales of electric fork-
tors included the electric forklift trucks in the six to eight tonne
lift trucks and warehouse trucks. This more than offset the mod-
load capacity category launched in the year under review and the
est contraction in revenue from diesel trucks, which was also
broadening of the range of reach trucks and double stackers. In
partially caused by the realignment of the heavy trucks business.
addition, order intake in terms of value included an increasing
From a regional perspective, Germany, the United Kingdom and
contribution from the service business, which was also boosted
China were the main contributors to the revenue growth.
by the acquisition of the dealer Willenbrock at the end of 2013.
Key figures – LMH –
in € million
Order intake
Revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Adjusted EBITDA margin
Adjusted EBIT margin
2014
3,234.4
3,077.2
441.2
486.6
270.3
339.6
15.8%
11.0%
2013
2,901.8
2,881.1
442.1
444.5
282.4
309.1
15.4%
10.7%
TABLE 021
Change
11.5%
6.8%
– 0.2%
9.5%
– 4.3%
9.9%
–
–
We keep the world moving.KION GROUP AG | Annual Report 2014
GROUP MANAGEMENT REPORT
Report on the economic position
93
Earnings
The acquisition of a majority stake in the dealer Arser in
Adjusted EBIT rose by 9.9 per cent year on year to €339.6 million
August 2013 had a positive impact on the order volume in Tur-
(2013: €309.1 million). The inclusion of the dealer Willenbrock and
key. In June 2014, STILL signed up the French company A.PSV
the realignment of the heavy trucks business also had a positive
Diffusion as a new sales partner for the North African market. In
impact on this figure. The adjusted EBIT margin was 11.0 per
April 2014, STILL opened a new European reconditioning centre
cent, a further improvement on the already high figure of 10.7 per
for used trucks at Rokietnica in Poland. This centre has the
cent in 2013.
capacity to recondition approximately 2,000 trucks each year
With the inclusion of non-recurring items, EBIT fell year on
and further reinforces the strong market position of this seg-
year to €270.3 million (2013: €282.4 million). The main reason
ment in eastern Europe. At the same time, product innovations
behind this decrease was the negative impact on EBIT from the
such as a new series of tow tractor models helped to secure the
equity-accounted investment in Linde Hydraulics, as already
positioning of STILL in the premium segment.
described at Group level.
Adjusted EBITDA for the LMH segment amounted to
Revenue
€486.6 million (2013: €444.5 million). This equated to an adjusted
Revenue in the STILL segment amounted to €1,850.7 million,
EBITDA margin of 15.8 per cent (2013: 15.4 per cent). > TABLE 021
exceeding the 2013 figure of €1,717.5 million by 7.8 per cent. Rev-
STILL segment
enue from the new trucks business was up by 1.9 per cent year
on year. In the service business, STILL generated significantly
higher revenue than in 2013 in all categories (servicing, spare
Business performance and order intake
parts, rentals and used trucks), the overall year-on-year revenue
The STILL segment enjoyed profitable growth in 2014. Order
growth amounting to 14.3 per cent.
intake increased by 12.0 per cent to €1,895.1 million (2013:
€1,692.0 million). The comparative order intake figures for 2013
Earnings
were exceeded in all sales regions, except in South America. New
Adjusted EBIT for the segment grew in proportion to revenue and
truck orders grew by 7.9 per cent, roughly in line with market
amounted to €133.6 million (2013: €123.9 million). The adjusted
growth. Electric
forklift trucks and warehouse technology
EBIT margin at 7.2 per cent remained at the same level as in 2013
accounted for a higher share of orders than before, whereas unit
(7.2 per cent). EBIT including non-recurring items improved year
sales of diesel trucks declined. STILL notched up significant
on year to €118.4 million (2013: €109.9 million).
gains, especially in western Europe, with the segment outper-
Adjusted EBITDA rose to €240.4 million (2013: €223.0 mil-
forming the market in terms of order growth in a number of areas,
lion). The adjusted EBITDA margin remained unchanged at
notably in Scandinavia and Italy.
13.0 per cent. > TABLE 022
We keep the world moving.KION GROUP AG | Annual Report 2014 94
Key figures – STILL –
in € million
Order intake
Revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
Adjusted EBITDA margin
Adjusted EBIT margin
2014
1,895.1
1,850.7
231.1
240.4
118.4
133.6
13.0%
7.2%
2013
1,692.0
1,717.5
214.4
223.0
109.9
123.9
13.0%
7.2%
TABLE 022
Change
12.0%
7.8%
7.8%
7.8%
7.7%
7.8%
–
–
Financial Services (FS) segment
already high level achieved in 2013 to €350.1 million (2013:
Business performance
€314.7 million). As a consequence of the expansion in the short-
term rental fleet, intra-group revenue rose by 20.5 per cent to
The Financial Services (FS) segment is the central financing part-
€270.7 million (2013: €224.7 million). Total segment revenue
ner in the KION Group. The FS segment benefited from the
therefore amounted to €620.9 million (2013: €539.4 million). Earn-
increase in business in the LMH and STILL brand segments,
ings before tax came to €5.2 million, exceeding the figure of
enjoying growth in the financing of short-term rental business
€4.7 million in 2013. The return on equity (ROE) was 13.0 per cent
(which is the operational responsibility of the brand segments)
(2013: 13.0 per cent).
and in the long-term leasing business with external end custom-
As at 31 December 2014, total segment assets amounted to
ers. As in 2013, a large proportion of the financing portfolio was
€1,361.3 million and had therefore increased by €111.9 million in
focused on business in western Europe, with some countries,
the year under review. Of this total, €521.9 million was accounted
notably in southern Europe, accounting for a disproportionately
for by lease receivables due from external customers (31 Decem-
high amount of volume growth. FS was also able to expand its
ber 2013: €458.1 million), while €473.0 million (31 December
business outside western Europe, generating significant growth
2013: €449.1 million) related to the financing of the short-term
particularly in eastern Europe.
rental fleet in the LMH and STILL segments. Leased assets under
FS has attracted further funding partners in connection with
operating
leases
relating
to external customer contracts
the growing business. It has focused on banks operating at a
amounted to €267.4 million (31 December 2013: €240.7 million).
regional level, providing useful additions to the already well-devel-
The funding of leases with external end customers gave rise
oped network of global partners. FS has also initiated discussions
to leasing liabilities with external funding partners amounting to
with potential banking partners in North America with a view to
€702.9 million (31 December 2013: €615.5 million). The leasing
supporting the planned expansion of business in the region.
liabilities arising from the funding of intra-group leases with LMH
and STILL relating to the short-term rental fleet business
Financial position and financial performance
amounted to €334.5 million (31 December 2013: €319.7 million).
Revenue from long-term leasing business with external end cus-
The net financial debt attributable to the FS segment was
tomers once again increased markedly compared with the
€155.1 million (31 December 2013: €163.6 million). > TABLE 023
We keep the world moving.KION GROUP AG | Annual Report 2014
GROUP MANAGEMENT REPORT
Report on the economic position
95
Key figures – Financial Services –
in € million
Revenue
Adjusted EBITDA
Adjusted EBIT
Earnings before taxes (EBT)
Total segment assets
Lease assets
Lease receivables
thereof lease receivables from long-term leases to third parties
thereof lease receivables from LMH and STILL from funding
of the short-term rental business
Lease liabilities ¹
thereof liabilities from funding of the long-term leases with third parties
thereof liabilities from funding of the short-term rental business
of LMH and STILL
Net financial debt
Equity
Return on equity ²
1 Includes liabilities from financing of the short-term rental fleet reported as other financial liabilities
2 Earnings before taxes / Average equity tied up during the reporting period excluding the net income of the period
2014
620.9
82.6
2.1
5.2
2013
539.4
66.2
0.7
4.7
TABLE 023
Change
15.1%
24.8%
> 100.0%
12.3 %
1,361.3
1,249.4
9.0 %
267.4
994.9
521.9
473.0
1,037.5
702.9
334.5
155.1
46.5
240.7
907.2
458.1
449.1
935.2
615.5
319.7
163.6
41.7
11.1%
9.7%
13.9%
5.3%
10.9%
14.2%
4.6%
– 5.2%
11.4%
13.0%
13.0%
–
Other segment
Earnings
Business performance
The total revenue generated by the segment amounted to
€235.7 million, roughly the same level as in 2013 (€235.1 million).
Group head office functions that do not come under any other
As in the previous year, the main revenue drivers were internal IT
segment are reported in the Other segment. These functions
and logistics services as well as KION India. Revenue generated
include the holding and service companies in the KION Group.
outside the KION Group totalled €47.6 million (2013: €48.2 mil-
KION India (formerly Voltas Material Handling) is also reported in
lion). Business volume at KION India increased slightly compared
the Other segment. In 2014, KION India expanded its sales and
with 2013.
service network and now has access to more than 60 sales out-
Adjusted EBIT for the segment reached €135.5 million, which
lets. Since the start of 2015, KION India has been included in the
was substantially up on the figure for 2013 (€73.5 million). For the
LMH brand segment.
most part, this increase was attributable to improved earnings in
We keep the world moving.KION GROUP AG | Annual Report 2014 96
Key figures – Other –
in € million
Order intake
Revenue
EBITDA
Adjusted EBITDA
EBIT
Adjusted EBIT
2014
236.5
235.7
141.1
152.5
124.1
135.5
2013
235.1
235.1
88.7
90.4
71.8
73.5
TABLE 024
Change
0.6%
0.3%
59.2%
68.7%
72.8%
84.3%
subsidiaries compared with 2013, as a consequence of which
risk. In this way, the KION Group creates a stable funding position
intra-group dividend income for the segment rose to €169.4 mil-
to maintain profitable growth.
lion (2013: €117.3 million). This was significantly more than enough
The financial resources within the KION Group are provided
to offset the primary costs for the Group head office functions.
based on an internal funding approach. The KION Group collects
These earnings are eliminated as part of the consolidation for the
liquidity surpluses of the Group companies in central or regional
KION Group. > TABLE 024
cash pools and, where possible, covers subsidiaries’ funding
requirements with intercompany loans. This funding enables the
Consolidation/reconciliation
KION Group to present a united front in the capital markets and
strengthens its bargaining position with banks and other market
Besides the intra-group supply relationships between the brand
participants.
segments and with Financial Services, the main factor in the EBIT
As a listed group of companies that also obtains funding
effect of minus €167.9 million (2013: minus €90.6 million) across
using corporate bonds and loan facilities, the KION Group con-
all segments was the intra-group dividend income.
siders the interests of shareholders, bond holders and banks in
its financial management. For the sake of these stakeholders, the
KION Group makes sure that it maintains an appropriate ratio of
Financial position
internal funding to borrowing.
The KION Group’s borrowing is based on a long-term
Principles and objectives of financial management
approach. The core components of this borrowing will become
due for repayment in the years 2018 to 2020. The Group occa-
By pursuing an appropriate financial management strategy, the
sionally arranges additional credit lines for KION Group compa-
KION Group makes sufficient cash and cash equivalents availa-
nies with local banks or leasing companies in order to comply
ble at all times to meet the Group companies’ operational and
with legal, tax and other regulations.
strategic funding requirements. In addition, the KION Group opti-
Among other things, the loan facility and the contractual con-
mises its financial relationships with customers and suppliers,
ditions relating to the issuance of the corporate bonds require
manages any collateral security offered and mitigates the finan-
compliance with loan conditions (‘covenants’). The loan facility
cial risk to its enterprise value and profitability, notably currency
also requires compliance with specific financial covenants during
risk, interest-rate risk, price risk, counterparty risk and country
the term of the agreement. Non-compliance with the covenants
may, for example, give lenders the right to terminate the loan or
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Report on the economic position
97
permit bondholders to put the corporate bonds back to the issuer
gramme; the shares equated to approximately 0.052 per cent of
prior to their maturity date. All covenants and restrictions were
the total share capital. Together with the 200,000 treasury shares
comfortably complied with in the past financial year.
already bought in 2013, these shares were offered from October
Depending on requirements and the market situation, the
initially to employees of the German companies of the KION
KION Group will also avail itself of the funding facilities offered by
Group participating in the KION Employee Equity Programme in
the public capital markets in future. The KION Group therefore
order to enable the employees to share in the benefits from the
seeks to maintain a strong credit profile in the capital and funding
performance of the business. Employees had acquired 87,438
markets by rigorously pursuing a value-based strategy, imple-
shares by the end of the year. Over the coming years, it is planned
menting proactive risk management and ensuring a solid funding
to extend the KION Employee Equity Programme to cover sub-
structure. On 7 April 2014, Moody’s raised the rating of the KION
sidiaries outside Germany.
Group and the bonds from Ba3 to Ba2 with a stable outlook.
Then, on 15 April 2014, Standard & Poor's raised its rating for the
Analysis of capital structure
KION Group from BB- with a positive outlook to BB, still with a
positive outlook.
Financial debt
The KION Group maintains a liquidity reserve in the form of
Long-term borrowing totalled €648.0 million as at 31 December
unrestricted, bindingly committed credit lines and cash in order to
2014 (31 December 2013: €975.0 million) and comprised the cor-
ensure financial flexibility and solvency.
porate bond due to mature in 2020 (€450.0 million) and the draw-
The KION Group only uses derivatives to hedge underlying
downs under the revolving credit facility classified as long term
operational transactions; in particular, hedging for currency and
(€198.0 million). The fixed-rate bond with a volume of €325.0 mil-
interest-rate risks. To the greatest possible extent, only cash flow
lion and a maturity date of 2018 was repaid early in April 2014. As
hedges were used for this purpose in the reporting year.
at the reporting date, an amount of €204.0 million had also been
drawn down from the revolving credit facility on a short-term
Main financing activities in the reporting period
basis (31 December 2013: €184.4 million). As at 31 December
2014, the unused, unrestricted loan facility stood at €841.0 million
On 15 April 2014, the KION Group repaid early and in full the
or – including unrestricted cash and cash equivalents – at
fixed-rate tranche of the corporate bond issued in 2011, which
€939.7 million.
was due to mature in 2018 and had a volume of €325.0 million,
At €909.6 million, financial debt was lower overall at the end
and the floating-rate tranche of the corporate bond issued in
of 2014 than at the end of 2013 (31 December 2013: €1,198.6 mil-
2013, which was due to mature in 2020 and had a volume of
lion). The main reason for this was the lower level of short-term
€200.0 million. The funds used for the repayment mainly origi-
borrowing. After deduction of cash and cash equivalents of
nated from a revolving credit facility maturing in June 2018. Also
€98.9 million, the remaining net financial debt came to €810.7 mil-
in April 2014, this revolving credit facility was increased by
lion (31 December 2013: €979.3 million). Net debt was approxi-
€198.0 million to a total of €1,243.0 million on the basis of bilateral
mately 1.0 times adjusted EBITDA compared with 1.4 times as at
lending agreements with a group of banks. These additional
31 December 2013 and declined therefore significantly relative to
loans mature in April 2019 and also have a variable interest rate.
earnings. > TABLE 025
This credit facility currently has lower interest rates than the two
repaid corporate bond tranches. A further core component of the
long-term funding of the KION Group is the remaining fixed-rate
corporate bond with a volume of €450 million, which is due for
repayment in 2020.
In September 2014, KION GROUP AG purchased 51,000
no-par-value treasury shares as part of a share buy-back pro-
We keep the world moving.KION GROUP AG | Annual Report 2014 98
Net financial debt
in € million
Corporate bond – fixed rate (2011/2018) – gross
Corporate bond – fixed rate (2013/2020) – gross
Corporate bond – floating rate (2013/2020) – gross
Liabilities to banks (gross)
Liabilities to non-banks (gross)
./. Capitalised borrowing costs
Financial debt
./. Cash and cash equivalents
Net financial debt
2014
–
450.0
–
459.9
6.6
– 6.9
909.6
– 98.9
810.7
2013
325.0
450.0
200.0
233.7
6.6
– 16.7
1,198.6
– 219.3
979.3
TABLE 025
Change
– 100.0%
0.0%
– 100.0%
96.8%
– 0.1%
58.8%
– 24.1%
54.9%
– 17.2%
Retirement benefit obligation
Further details about the retirement benefit obligation are
The KION Group supports pension plans in many countries.
provided in note [28] in the notes to the consolidated financial
These plans comply with legal requirements, local practice and
statements.
the situation in the country in question. They are either defined
benefit pension plans, defined contribution pension plans or mul-
Lease liabilities
ti-employer benefit plans. As at 31 December 2014, the retire-
Continuing growth in the leasing business with end customers in
ment benefit obligation under defined benefit pension plans
2014 led to a correspondingly higher funding requirement. Lease
amounted to a total of €787.5 million (31 December 2013:
liabilities under sale-and-leaseback arrangements
rose
to
€560.1 million). Most of this obligation related to pension plans in
€707.7 million (31 December 2013: €617.1 million). Of this total,
Germany. The significant year-on-year increase overall was
€461.7 million was accounted for by non-current lease liabilities
largely attributable to changes in the discount rate, given the pre-
(31 December 2013: €403.7 million) and €246.0 million by current
vailing low level of interest rates. After deduction of the pension
lease liabilities (31 December 2013: €213.3 million).
plan assets amounting to €21.6 million, the remaining net obliga-
Short-term rentals and procurement leases are allocated to
tion came to €765.8 million (31 December 2013: €537.7 million).
the brand companies. The corresponding liabilities are reported
Contributions to pension plans that are entirely or partly
under other financial liabilities (see note [33] in the notes to the
funded via funds are paid in as necessary to ensure sufficient
consolidated financial statements). As at 31 December 2014,
assets are available and to be able to make future pension pay-
other financial liabilities included liabilities of €339.1 million (31
ments to pension plan participants. These contributions are
December 2013: €327.5 million) arising from sale-and-leaseback
determined by various factors, such as the funded status, legal
transactions used to finance the short-term rental fleet. The item
and tax considerations, and local practice. The payments made
also included liabilities from residual value guarantees amounting
by the KION Group under retirement pension obligations in 2014
to €18.5 million (31 December 2013: €17.3 million). These residu-
totalled €20.4 million, comprising €14.4 million for direct pension
al-value liabilities relate to residual-value guarantees provided in
payments and €5.6 million for employer contributions to plan
connection with the sale of assets to leasing companies, where
assets. Transfers to external pension funds resulted in further
the guaranteed amount is more than 10.0 per cent of the fair value
payments of €0.4 million.
of the asset in question.
We keep the world moving.KION GROUP AG | Annual Report 2014
GROUP MANAGEMENT REPORT
Report on the economic position
99
Equity
Funding vehicles not reported on the statement
The level of equity changed only marginally in the reporting year.
of financial position
As at the reporting date, equity amounted to €1,647.1 million, an
The KION Group also makes use of funding vehicles not reported
increase of 2.3 per cent year on year (31 December 2013:
in the statement of financial position. As part of its financing activ-
€1,610.0 million). In addition to the positive effect from net income
ities, the KION Group has entered into leases both for its own use
there were significant negative effects recognised in other com-
and for transfer to customers. In accordance with the relevant
prehensive income amounting to €112.7 million, primarily as a
IFRS requirements, such leases are not reported as either an
result of the reduction in the discount rate used for pension obli-
asset or a liability on the statement of financial position. The nom-
gations. The equity ratio nevertheless improved slightly to
inal amount of the contractual obligations arising from such
26.9 per cent (31 December 2013: 26.7 per cent). > TABLE 026
leases not reported in the statement of financial position was
€250.8 million as at 31 December 2014 (31 December 2013:
€206.0 million; see note [34] in the notes to the consolidated
financial statements).
(Condensed) balance sheet, equity and liabilities
TABLE 026
in € million
Equity
Non-current liabilities
thereof:
Retirement benefit obligation
Financial liabilities
Deferred tax liabilities
Lease liabilities
Current liabilities
thereof:
Financial liabilities
Trade payables
Lease liabilities
Total equity and liabilities
2014
1,647.1
in %
26.9%
2013
1,610.0
in %
26.7%
Change
2.3%
2,688.3
43.9%
2,711.1
45.0%
– 0.8%
787.5
646.8
320.9
461.7
12.8%
10.6%
5.2%
7.5%
560.1
971.1
306.2
403.7
9.3%
16.1%
5.1%
6.7%
40.6%
– 33.4%
4.8%
14.4%
1,793.0
29.3%
1,705.3
28.3%
5.1%
262.9
564.6
246.0
6,128.5
4.3%
9.2%
4.0%
–
227.5
550.5
213.3
6,026.4
3.8%
9.1%
3.5%
–
15.5%
2.6%
15.3%
1.7%
We keep the world moving.KION GROUP AG | Annual Report 2014 100
Analysis of capital expenditure
business. A higher level of working capital at the reporting date
had the effect of reducing cash flow.
Capital expenditure (excluding leased and rental assets) was
Net cash used for investing activities was lower than in the
again funded using cash flow from operating activities in the
previous year at €297.8 million (2013: net cash used of €310.7 mil-
reporting year. The volume of capital expenditure went up by
lion). Capital expenditure on developments (R&D), property, plant
5.9 per cent year on year to €133.1 million (2013: €125.8 million).
and equipment, and the rental fleet business (net) rose by
As was the case in 2013, one major item of capital spending took
€20.5 million year on year. In the previous year, net cash totalling
the form of capitalised development costs in the Linde Material
€25.1 million had been used to acquire Arser and the remaining
Handling and STILL segments, for example in relation to the
shares in Willenbrock. The main inflows from investing activities
enhancement of electric forklift trucks, warehouse technology
related to the disposal of an equity investment of the Willenbrock
products, innovative intralogistics solutions and lithium-ion tech-
Group, dividend payments and net inflows from disposals of
nology. In addition, the KION Group continued to modernise its
property, plant and equipment.
production and technology sites, especially in Germany and Asia.
Free cash flow – the sum of cash flow from operating activi-
Another area of capital expenditure was the ongoing improve-
ties and investing activities – increased by €110.3 million to
ment of the IT infrastructure, including standardisation of the
€305.9 million in the reporting period (2013: €195.6 million). As in
global sales systems.
2013, a large part of it was used for repayments.
The volume of capital expenditure rose in both brand seg-
At minus €428.1 million, cash flow from financing activities
ments, above all due to the modernisation of equipment and pro-
was down significantly on the prior-year figure (2013: minus
duction facilities. The construction of the new plant in the Czech
€531.6 million), which had been particularly affected by the IPO
Republic will only have a material impact on the volume of capital
and the restructuring of financial debt. The net repayment of
expenditure from 2015 onwards.
financial debt in the year under review totalled €301.2 million
Analysis of liquidity
(2013: €1,105.7 million). The financial debt taken up during the
year, which came to €1,375.2 million, was more than offset by
repayments totalling €1,676.4 million. These repayments included
Liquidity management is an important aspect of central financial
€525.0 million in respect of the early redemption of the bond
management. The sources of liquidity are cash and cash equiva-
tranches plus early repayment charges of €14.8 million. Net cash
lents, cash flow from operating activities and amounts available
of €82.5 million was also used for regular interest payments (2013:
under credit facilities. As at 31 December 2014, cash and cash
€112.6 million). The distribution of a dividend for 2013 of €0.35 per
equivalents had declined to €98.9 million owing to better utilisa-
share resulted in an outflow of funds of €34.5 million, while the
tion of intra-group cash on hand outside Germany (31 December
acquisition of a further 51,000 shares for employees in 2014 gen-
2013: €219.3 million). Taking into account the undrawn credit
erated an outflow of €1.5 million. > TABLE 027
facilities, the KION Group had unrestricted cash and cash equiv-
alents of €939.7 million at the end of 2014, compared with
€1,079.6 million as at 31 December 2013. Net debt decreased by
€168.6 million.
The KION Group’s net cash provided by operating activities
totalled €603.8 million, which was significantly higher than the pri-
or-year figure of €506.3 million after restatement to reflect the
rental assets. The main reason for this was the €68.8 million
decrease in tax payments, which had a positive impact on cash
flow. This decrease was due to the fact that there had been one-
off tax payments in connection with the sale of the hydraulics
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Report on the economic position
101
(Condensed) cash flow statement*
in € million
EBIT
Cash flow from operating activities
Cash flow from investing activities
Free cash flow
Cash flow from financing activities
Currency effects on cash
Change in cash and cash equivalents
2014
347.0
603.8
– 297.8
305.9
– 428.1
1.8
– 120.4
2013
374.2
506.3
– 310.7
195.6
– 531.6
– 7.0
– 343.0
TABLE 027
Change
– 7.2%
19.2%
4.2%
56.4%
19.5%
> 100.0%
64.9%
* Last year's figures were adjusted due to a change in presentation, for details see ‘Other disclosures on Consolidated statement of cash flows’
Net assets
Non-current assets
Financial services activities also contributed to the increase
in non-current assets. Leased assets under leases with end cus-
tomers that are classified as operating leases rose slightly due to
the overall growth in business, advancing by €27.1 million to
Non-current assets had risen by €89.1 million compared with the
€279.0 million (31 December 2013: €251.9 million). Long-term
end of 2013, reaching €4,524.8 million. Intangible assets
lease receivables arising from leases with end customers that are
accounted for €2,412.5 million (31 December 2013: €2,428.7 mil-
classified as finance leases went up by €36.4 million to
lion). Goodwill and the KION Group’s brand names represented
€345.3 million, compared with €308.8 million at the end of 2013.
€2,092.4 million of that amount (31 December 2013: €2,089.4 mil-
Another major factor in the rise in non-current assets was the rec-
lion). Property, plant and equipment (including capitalised devel-
ognition of deferred tax assets. However, the increase in assets
opment costs) declined moderately because the capital expend-
was partly offset by the impairment charge recognised on the
iture of €133.1 million was more than offset by depreciation of
stake held in Linde Hydraulics. Overall, equity-accounted invest-
€150.3 million. Rental assets in the brand segments’ short-term
ments fell from €138.6 million to €114.6 million.
rental fleet rose to €487.1 million (31 December 2013: €461.2 million).
An explanation of the change in deferred tax assets is provided
in note [14] in the notes to the consolidated financial statements.
We keep the world moving.KION GROUP AG | Annual Report 2014
102
Current assets
Another factor was the rise in other current financial assets.
The main reason for this was the remeasurement of existing
The 0.8 per cent growth in current assets to €1,603.7 million
options relating to Linde Hydraulics.
(31 December 2013: €1,590.7 million) was the result of higher
Lease receivables from external end customers advanced
trade receivables and a slight increase in inventories. Inventories
from €170.8 million as at 31 December 2013 to €202.5 million on
had fallen again significantly from their level at 30 June 2014.
the reporting date owing to the increase in business volume.
The increase in the volume of receivables is attributable to
The rise in current assets was restricted by the sharp
higher product sales, especially in the second half of the year.
decrease in cash and cash equivalents to €98.9 million
There was only an insignificant change in the average number of
(31 December 2013: €219.3 million), which was attributable to
days outstanding of receivables.
the increased use of Group liquidity to reduce financial debt.
> TABLE 028
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
Total inventories
2014
122.2
71.5
330.8
4.7
529.2
2013
108.3
66.7
331.2
5.5
511.8
TABLE 028
Change
12.8%
7.1%
– 0.1%
– 14.5%
3.4%
We keep the world moving.KION GROUP AG | Annual Report 2014
GROUP MANAGEMENT REPORT
Report on the economic position
103
Working capital (inventories and trade receivables less trade
payables) was €562.8 million as at the reporting date, which was
higher than it had been a year earlier (31 December 2013:
€520.0 million). > TABLE 029
(Condensed) balance sheet, assets
TABLE 029
in € million
Non-current assets
thereof:
Goodwill
Brand names
Deferred tax assets
Rental assets
Leased assets
Lease receivables
Current assets
thereof:
Inventories
Trade receivables
Lease receivables
Other current assets
Cash and cash equivalents
2014
4,524.8
in %
73.8%
2013
4,435.8
in %
73.6%
Change
2.0%
1,497.1
24.4%
1,494.7
24.8%
595.4
357.9
487.1
279.0
345.3
9.7%
5.8%
7.9%
4.6%
5.6%
594.7
295.5
461.2
251.9
308.8
9.9%
4.9%
7.7%
4.2%
5.1%
0.2%
0.1%
21.1%
5.6%
10.7%
11.8%
1,603.7
26.2%
1,590.7
26.4%
0.8%
529.2
598.2
202.5
168.2
98.9
8.6%
9.8%
3.3%
2.7%
1.6%
511.8
558.7
170.8
114.7
219.3
8.5%
9.3%
2.8%
1.9%
3.6%
3.4%
7.1%
18.6%
46.7%
– 54.9%
1.7%
Total assets
6,128.5
6,026.4
We keep the world moving.KION GROUP AG | Annual Report 2014
104
NON-FINANCIAL PERFORMANCE
INDICATORS
enables the Company to tackle the challenges of demographic
change.
The KION Group has strengthened its employer brands, par-
ticularly those of LMH and STILL. In 2014, STILL was recognised
as one of Germany’s best employers by the Top Employers Insti-
The KION Group’s enterprise value is determined not only by
tute, an international certification organisation, for the third time in
financial KPIs but also by non-financial influencing factors. These
a row. It also received a ‘Germany’s Top Employers’ award from
factors relate to the Company’s relations with its customers and
the CRF Institute.
employees, to its technological position and to environmental
considerations – and they also have an impact on the success of
Headcount
the Strategy 2020. The overarching objective of establishing the
KION Group as the global market leader with above-average
The average number of employees (full-time equivalents (FTEs),
profitability, efficiency and resilience can only be achieved if the
including trainees and apprentices) in the KION Group was
Group succeeds in:
competent and committed employees at all sites;
– being an attractive and responsible employer that can retain
– developing products that are closely tailored to customers’
– continually increasing the customer benefits provided by its
needs and environmental requirements now and in future;
products and services and designing production processes
22,438 in 2014 (2013: 21,632 FTEs). As at 31 December 2014, the
KION Group companies employed 22,669 FTEs, 396 more than
a year earlier.
Much of this increase was accounted for by the rise in head-
count at STILL GmbH in Hamburg – mainly in production and
logistics departments – and at LMH China. This increase was
partly offset by a reduction in employee numbers, primarily
accounted for by the loss of 66 jobs at the plant in Merthyr Tydfil
in such a way that resources are conserved and emissions
(UK), which closed in 2014, and the disposal of Willenbrock
are avoided as far as possible.
Arbeitsbühnen GmbH & Co KG, which included the transfer of
its 58 employees.
The KION Group firmly believes that these aspects are crucial to
At regional level, there were only slight changes in headcount
its positioning as a pioneering company in a highly competitive
overall. The increases in Germany and China were attributable to
environment.
the factors mentioned above. There were also substantial rises in
growth markets such as Poland. > TABLE 030
Employees
HR strategy
The KION Group’s success is founded on the capabilities and
commitment of its employees. Its human resources (HR) strategy
is geared towards providing the best possible support for stra-
tegic development and international growth. The KION Group
aims to always have a sufficient number of qualified, committed
employees at all levels of its operations and to offer them attrac-
tive working conditions and the opportunities afforded by work-
ing for an international group of companies. This strategy also
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Report on the economic position
105
Employees (full-time equivalents)*
TABLE 030
31/12/2014
Western Europe
Eastern Europe
Americas
Asia
Rest of world
Total
31/12/2013
Western Europe
Eastern Europe
Americas
Asia
Rest of world
Total
LMH
8,607
1,096
138
3,560
544
STILL
6,792
671
513
0
0
13,945
7,976
8,704
1,060
122
3,370
568
6,559
629
527
0
0
13,824
7,715
FS
60
0
0
0
0
60
59
0
0
0
0
59
Other
526
0
0
162
0
688
519
0
0
156
0
675
* Number of employees in full-time equivalents as at balance sheet date; Allocation according to the contractual realtionship
Personnel expenses amounted to €1,231.9 million. The main
reason for this advance of 7.7 per cent compared with 2013 was
the increase in average headcount for 2014 and changes to collec-
tive bargaining agreements. > TABLE 031
Personnel expenses
in € million
Wages and salaries
Social security contributions
Post-employment benefit costs and other benefits
2014
966.4
215.7
49.7
2013
900.5
203.7
39.5
Total
1,231.9
1,143.8
Total
15,985
1,767
651
3,722
544
22,669
15,841
1,689
649
3,526
568
22,273
TABLE 031
Change
7.3%
5.9%
25.8%
7.7%
We keep the world moving.KION GROUP AG | Annual Report 2014
106
Diversity
The KION Group endeavours to offer its employees interest-
ing career opportunities and flexible, family-friendly working-time
The KION Group sees itself as a global manufacturer with strong
models. The Group companies also collaborate closely on areas
intercultural awareness: as at 31 December 2014, people from
such as talent management and training & development pro-
69 different countries were employed across the KION Group.
grammes. This helps to systematically identify and support staff
One of the ways in which the Company promotes inter-
with potential, high performers and experts in key functions.
national collaboration between employees is the KION expat pro-
Organised in cooperation with the European School of Manage-
gramme, which gives employees the opportunity to transfer to
ment and Technology (ESMT), KION Campus is an international,
different countries where the KION Group is represented.
cross-brand executive development programme aimed at the
The KION Group tackles the challenges of demographic
Group’s 300 or so top executives. In addition, new managers at
change by providing working conditions that are suited to
STILL receive support under the First Leading programme during
employees’ age-related requirements and organising healthy-liv-
their first few years. Prospective managers can enhance their
ing programmes so that it can continue to benefit from older
skills through STILL’s Young Professional programme, while
employees’ experience. As at 31 December 2014, 24.2 per cent
highly talented staff around the world can participate in the Inter-
of employees were over the age of 50 (31 December 2013:
national Junior Circle. The STILL Academy offers subject-specific
23.5 per cent). A total of 192 employees were participating in
and interdisciplinary training courses. Opportunities at Linde
partial retirement models as at the reporting date (31 Decem-
Material Handling include a virtual assessment centre for future
ber 2013: 250).
managers.
An important diversity objective is increasing the proportion
of female employees. The proportion of the total workforce made
Training and professional development
up of women remained stable at 16.1 per cent in 2014 (2013:
16.1 per cent). However, the proportion of management positions
The companies in the KION Group currently offer training for
occupied by women rose slightly, from 8.0 per cent in 2013 to
21 professions in Germany. They employed a total of 577 trainees
8.2 per cent in 2014. Back in 2013, the Executive Board resolved
and apprentices as at 31 December 2014 (31 December 2013:
to double the proportion of women in management positions by
591). The ratio of trainees and apprentices to other employees
2020. Going forward, the KION Group intends to fill more man-
therefore remains at a steady, high level. Besides providing dual
agement positions with employees from outside Germany in
vocational training schemes, KION Group companies offer work
order to better reflect the Company’s international make-up.
placements for students combining vocational training with a
The KION Group offers flexible working-time models that
degree course in cooperation with various universities.
promote a good work-life balance. In addition, Linde Material
Handling has implemented a company agreement about
Sharing in the Company’s success
‘teleworking/home office’, which stipulates the terms on which
employees can work at home on a mutually agreed and
Having successfully floated on the stock exchange, the KION
voluntary basis.
Group launched the KION Employee Equity Programme (KEEP)
in 2014. Initially limited to Germany, the programme is to be
Development of specialist workers and executives
successively rolled out to other countries. In 2014, around
1,800 employees in Germany participated in this share match-
Finding highly qualified people to fill specialist and executive posi-
ing programme, which means around 24 per cent of the employ-
tions is crucial to the KION Group’s success. As a result, one of
ees in Germany who were eligible to take part became employee
the focuses of HR work across the Group was again the recruit-
shareholders. Following the successful introduction in Germany,
ment and development of suitable young talent in 2014.
the plan for 2015 is to extend KEEP to China, France, Italy and the
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Report on the economic position
107
United Kingdom so that employees there also have the opportu-
and logistics employees in 2014. Two pilot projects on behav-
nity to share in the Company’s success.
iour-based safety were also launched. Their objective is to create
In 2014, the remuneration of the Group’s 300 or so top exec-
greater awareness of health and safety in the workplace and
utives was aligned with that of the Executive Board by introducing
therefore to further reduce the number of accidents. At STILL in
a remuneration component designed to provide a long-term
Hamburg, the company doctor works closely with safety officers
incentive. The first tranche of the KION Long-Term Incentive Pro-
to optimise ergonomics at employees’ workstations in order to
gramme (LIFT) was issued in the reporting year.
lower health risks and the risk of accidents caused by working
Employee commitment
conditions. Healthy-eating initiatives also continued.
Last year, more than 2,300 Linde Material Handling
employees attended training courses designed to promote a
The KION Group’s products and services destined for its cus-
culture of safety.
tomers are produced by committed and motivated employees.
That is why all KION companies aim to ensure a high level of
employee commitment. LMH surveyed a total of 8,480 em ploy-
Research and development
ees in China, France, Germany and the United Kingdom on this
subject in 2014, with a response rate of 74 per cent. The results
Strategic focus of research and development
of the survey were presented and discussed in all departments,
enabling improvement measures to then be identified. These
The focus of research and development (R&D) is aligned with the
measures were focused on establishing a culture of open dia-
Strategy 2020. The KION Group pursues the primary objective of
logue and discussion within teams and between the Company
increasing the customer benefits in all price segments and sales
and its employees.
regions and, by adhering to modular and platform strategies,
offering high quality at competitive prices. To this end, R&D is
Health and safety in the workplace
designed to be as cost-effective as possible in order to reduce
the complexity and diversity of products and shorten develop-
In the reporting year, the KION Group continued to expand its
ment times. The cross-brand R&D platform enables research
activities relating to health, safety and the environment (HSE). A
results and technological expertise to be shared, although
corporate policy sets out the KION Group’s obligations, which
responsibility for product development lies mainly with the indi-
include taking comprehensive precautions to create a safe work-
vidual companies.
ing environment and ensuring employees know how to avoid
In the premium segment, the focus remains on total cost of
risks and accidents.
ownership (TCO) – including purchase price, maintenance and
HSE activities centre on an internal audit programme,
repair costs and fuel consumption – while complying with envi-
which covers all of the Group’s production facilities. The aim of
ronmental targets and regulatory requirements. The objective
the regular audits is to systematically document existing HSE
here is to ensure ongoing enhancement of the portfolio, which will
measures and processes and provide specific ideas for how
secure the Company’s position as a leading technology provider.
they can be developed further (more details can be found in the
Another aim is to integrate the KION Group’s logistics solutions
‘sustainability’ section).
into customers’ value chains and harness the potential of new
The health rate for 2014 stood at the high level of 96.5 per cent.
application areas. In the volume and economy segments, the
Fewer workplace accidents were registered than in 2013.
KION Group is establishing shared, cross-brand and cost-
STILL worked on implementing its detailed three-step con-
efficient platforms that enable low-cost production yet allow a
cept for health, safety and the environment in the year under
strong degree of regional differentiation in the industrial trucks.
review. All managers had attended comprehensive training on
HSE in 2013, and the courses were extended to all production
We keep the world moving.KION GROUP AG | Annual Report 2014 108
Key R&D figures
The KION Group takes comprehensive measures to protect the
products it develops against imitations. In 2014, the KION com-
In 2014, the KION Group actively stepped up its total spending on
panies were granted a total of 140 patents (2013: 85). As at
research and development, which amounted to €119.7 million.
31 December 2014, the companies of the KION Group held a
This constituted a year-on-year rise of 4.8 per cent (2013:
total of 1,689 patent applications and issued patents (31 Decem-
€114.2 million). The KION Group therefore channelled 2.6 per cent
ber 2013: 1,596 patent applications and issued patents).
of total revenue (2013: 2.5 per cent), or 4.7 per cent of revenue
from new truck business (2013: 4.5 per cent), into R&D and was
Focus of R&D in 2014
thus once again higher than the industry average in its R&D
spending. Total R&D expenditure included €43.7 million in capi-
Reduction of emissions and fuel consumption
talised development costs (2013: €45.7 million). These expenses
Tighter emissions standards for diesel trucks and the sustained
were offset by depreciation and amortisation of €49.7 million
trend for e-mobility have pushed up demand for zero-emission
(2013: €45.1 million) (see note [17] in the notes to the consolidated
electric forklift trucks, including those with large load capacities.
financial statements).
In response, both LMH and STILL have extended their range of
The number of full-time jobs in R&D teams grew by 79 to
electric counterbalance trucks that can lift up to eight tonnes.
1,023. Within the R&D organisation, the development centre in
In June, STILL presented its reworked RX 20 with much
the southern Chinese city of Xiamen carries out cross-brand
improved performance capabilities. LMH launched the new E12-
development work, focusing mainly on the economy and volume
E20 EVO electric counterbalance truck models in the 1.2-2 tonne
price segments in emerging markets. It is playing a crucial role in
load capacity category. Thanks to this facelift, the new models
bringing the groupwide platform strategy to fruition. That is why
consume up to 17 per cent less energy than their predecessors.
R&D headcount at the centre again increased particularly
One of the reasons for this saving was the use of different driving
strongly, climbing from 232 FTEs in the previous year to 282 FTEs
dynamics programmes that provide the optimum balance
in 2014. > TABLE 032
between high performance and low energy consumption for the
specific situation.
Research and development (R&D)
in € million
Research and development costs (P&L)
Amortisation expense (R&D)
Capitalised development costs
Total R&D spending
R&D spending as percentage of revenue
2014
125.7
– 49.7
43.7
119.7
2.6%
2013
113.6
– 45.1
45.7
114.2
2.5%
TABLE 032
Change
10.6%
– 10.3%
– 4.2%
4.8%
–
We keep the world moving.KION GROUP AG | Annual Report 2014
GROUP MANAGEMENT REPORT
Report on the economic position
109
To provide customers with clear information on how their environ-
Automation and networking
mental footprint is affected as a result of deploying a Linde truck,
In May 2014, STILL received the International Forklift Truck of the
Linde Material Handling worked with the Fraunhofer Institute for
Year Award (IFOY Award) in the Automated Guided Vehicles cat-
Building Physics (IBP) to develop a method for assessing the envi-
egory for its iGoEasy automation solution, the world’s first system
ronmental impact of its forklift trucks and warehouse trucks
solution for facilities with small transport volumes. All configura-
throughout the product lifecycle. In addition, lifecycle assessments
tion, control and monitoring of the system is carried out using an
for the company’s seven main product groups were prepared.
iPad. Last year, STILL also created a raw materials warehouse
equipped with all the necessary automated components: for the
Modular and platform strategy
first time, semi-automated shuttles communicate with fully auto-
The KION Group is establishing shared, cross-brand and cost-
mated reach trucks so that raw materials can be carried to the
efficient platforms for product development and production that
right production supply area at the right time.
are geared to the volume and economy segments. However,
Growing demand for individualised products means custom-
market success depends on these platforms allowing a strong
ers need increasingly flexible material flow strategies. That is
degree of regional differentiation in the industrial trucks. One
why more and more manufacturers are deploying tugger trains
example is the diesel truck platform developed by Baoli in China,
to move materials around their premises. Both STILL and
which is used for region-specific economy trucks in India (Voltas)
Linde updated their tugger train solutions in 2014. STILL
and Brazil (STILL). Another platform, developed in Xiamen, was
launched the first tow tractors in its LTX model series in July.
also launched for the global volume segment in 2014.
Available in many variants, this series provides custom trans-
In western Europe, the premium brands, Linde and STILL,
port solutions for various industries and applications. In May,
will continue to use different platforms for their counterbalance
LMH presented two new logistics train solutions: the Linde
trucks in order to maintain the defining characteristics of their
Logistic Train and Linde Factory Train are designed for the cycle-
brands, but will increasingly deploy shared modules. Some of
based flow of materials found in modern production facilities.
their warehouse technology products have always had shared
The automation and networking of supply chains remains an
roots, such as the very narrow aisle trucks that are produced for
important subject. In May 2014, LMH presented the latest gener-
both brands in Reutlingen.
Drive technology
ation of its ‘connect:’ fleet management solution. This product
family consists of a local database and a cloud-based data portal,
new management and analysis software, and a suite of software
As in the previous year, development of new drive technologies
modules that can be combined to form individual functional pack-
centred on powerful lithium-ion batteries for electric trucks. In
ages that are tailored to the specific customer requirements. The
October 2014, LMH and STILL added warehouse trucks (pedes-
solution connects forklift trucks and warehouse trucks with the
trian pallet trucks) fitted with lithium-ion batteries to their product
local database or the servers of the Linde Data Cloud via Blue-
ranges for the first time. Both solutions are highly efficient
tooth or wireless. Because it can be retrofitted, the system can
because each truck, including the controls, electronics, battery
be installed on all trucks in a fleet, including older and third-
and charger, forms a system whose different components com-
party vehicles.
municate with each other.
During the reporting year, ‘connect:’ was used in a self-
LMH and STILL are also pushing forward with the develop-
driving car for the first time. In the XchangE concept vehicle
ment of lithium-ion batteries for counterbalance trucks in higher
developed by Rinspeed AG of Switzerland, the system uses RFID
weight categories along with the necessary charging technology.
technology to manage access control and transmits the technical
The fuel-cell powered trucks of Linde Material Handling were
data needed to monitor autonomous driving. It therefore per-
designated ‘best innovation’ in the industrial truck category of the
forms the same technical functions that it does in a fleet truck.
LOGISTRA best practice: Innovations 2014 awards, which are
Another application for ‘connect:’ was showcased in a service
voted for by readers of the trade journal LOGISTRA.
vehicle developed jointly with Deutsche Telekom. The interaction
We keep the world moving.KION GROUP AG | Annual Report 2014 110
between ‘connect:’ and Deutsche Telekom’s Arrival Control app
Customers
enables customers to track the service vehicle’s current location
and estimated time of arrival minute by minute. Deutsche Tele-
The KION brand companies regularly exhibit at the leading trade
kom and LMH have signed a cooperation agreement under which
fairs for their sector so that they can strengthen their relationships
the app solution will be tested by LMH’s customer service organ-
with customers and partners. Contact with customers at trade
isation. Customers will benefit from more transparency and a
fairs also makes it possible to gauge interest in the product inno-
greater ability to plan.
vations on show among new and existing customers. In May,
LMH teamed up with 18 partners and suppliers to demonstrate
Workplace safety and ergonomics
intralogistics in an interactive exhibition entitled World of Material
There was a world premiere for LMH in May 2014: the Linde
Handling, which was held over a number of weeks in the grounds
Safety Pilot is an electronic driver assistance system that helps to
of Mainz’s exhibition centre. Some 6,000 customers, prospects,
prevent operating and driving errors when trucks are used at their
journalists and employees from more than 40 countries took up
limits, thereby reducing the risk of accidents caused by trucks tip-
the invitation to attend talks, exhibitions and product demonstra-
ping over. Not only does the system provide the driver with visual
tions. Linde Material Handling exhibited its ‘connect:’ connectivity
and acoustic warnings, the truck control unit also actively inter-
solution at the Geneva International Motor Show in 2014.
venes by regulating the truck.
STILL showcased its trucks and system solutions at LogiMAT
Another driver assistance system has been developed
as well as at the CeMAT trade fairs in Hannover and Russia. Visi-
especially for Linde reach trucks with tall masts, which are
tors were also able to see the cubeXX concept truck in action for
becoming ever more common due to increasingly high racks. The
the first time, following its unveiling in the previous year. In Sep-
Dynamic Mast Control (DMC) system compensates for mast
tember, existing and prospective customers were invited to an
oscillations and deflections quickly, precisely and energy-
international efficiency day at the STILL Arena in Hamburg, where
efficiently. This means the driver does not have to wait for the load
they attended presentations and workshops.
to stop moving and can work much faster and more safely. In
April 2014, STILL began offering a new reach truck (FM-X) with
active load stabilisation, the first to achieve a lift height of up to
Sustainability
13 metres. Active load stabilisation reduces the time that a driver
has to wait before lifting a load onto a high rack by up to
The KION Group strives for a balance between environmental,
80 per cent.
economic and social considerations in its business activities. This
Furthermore, LMH brought out two compact double stackers
focus on sustainability is reflected in its eco-friendly and safe
with enhanced safety features in February 2014. They are designed
products that help customers to conserve energy, reduce emis-
for light-duty logistics applications, such as in supermarkets. The
sions and comply with strict workplace safety standards (see the
features include SafetySpeed, which regulates driving speed, and
‘research and development’ section). Furthermore, the KION
SafetyLift, which prevents the accidental raising or lowering of the
Group ensures that its production processes have as minimal an
lifting equipment. To avoid collisions, the double stackers are fitted
impact on the environment as possible and that it offers safe and
with four different braking systems.
discrimination-free working conditions.
The KION Code of Compliance lays down binding rules of
conduct for all companies in the Group and their employees. All
other standards and initiatives relating to health, safety and the
environment (HSE) are derived from this code. The corporate
policy on workplace safety, health and the environment defines
a number of requirements for the KION Group companies,
including:
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Report on the economic position
111
managers in sales & service was held for the first time. Following
the same approach as the production departments, the aim is to
set up a standardised reporting and analysis system for acci-
dents and risks in the sales & service organisation.
All plants capture data about their energy consumption, vol-
umes of waste and recycling, water consumption and emissions
of CO2 and volatile organic compounds (VOC). This data is
included in an annual internal environmental report. Data for 2014
was not available at the time this group management report was
compiled, so the key data from the 2013 environmental report is
presented below.
The total volume of primary energy consumed by all produc-
with the necessary training;
codes of conduct and industry standards;
– as a minimum, complying with all relevant national laws,
– ensuring safe working conditions and providing employees
– avoiding the release of pollutants, discharge and emissions
– reducing the volume of waste by making better use of raw
– using materials, products and processes that comply with
– using resources, energy and raw materials efficiently.
materials and using recyclable materials;
into the environment as far as possible;
best environmental practice;
In 2014, the KION Group established new minimum standards for
tion sites in the KION Group in 2013 amounted to 285.5 gigawatt
employment based on the fundamental conventions drawn up by
hours, a far lower figure than in 2012. The largest source of energy
the International Labour Organization (ILO). These include free-
was electricity (36.9 per cent), followed by gas (32.1 per cent) and
dom of association, the right to collective bargaining, elimination
coal (22.3 per cent).
of forced and child labour, and a ban on discrimination in respect
At 39,735 tonnes, the volume of waste was also much
of employment and occupation. Furthermore, the KION Group is
smaller than in previous years. Of this total amount, 91.8 per cent
committed to ensuring health and safety standards in the work-
was recycled (2012: 92.2 per cent). There was a fall in both the
place and to paying its employees remuneration that is appro-
absolute volume of non-recycled waste and the proportion of
priate to the industry in the particular country and, at the very
that volume that consisted of environmentally hazardous waste
least, provides a living wage.
compared with 2012. Furthermore, the figures reported for
Regular audits at all production sites increase awareness of
water consumption and emissions of volatile organic com-
workplace safety and environmental protection. The standard-
ised system of HSE KPIs introduced in 2013 is proving its worth.
pounds and the greenhouse gas CO2 were also lower in 2013
than in the previous year.
It serves to bring HSE standards into line worldwide and to create
The KION Group’s objective is to gradually establish a certi-
a shared culture of awareness regarding the environment and
fied system for quality, environmental and safety management at
safety. All audits in the reporting year showed a clear improve-
all sites. At the end of the year, KION sites had been certified in
ment in the individual units compared with 2013.
accordance with the following international standards:
The KION Safety Championship was introduced in 2014 as a
way of providing additional impetus and motivation for employees
to engage with HSE matters. All production facilities take part.
Based on regular reporting from the individual units, a panel of
judges decides which units deserve to be rewarded for special
dedication or considerable progress in an area of HSE. The
assessment takes account of the units’ different economic and
cultural situations.
Safety experts at the KION Group’s various production facili-
& service units
– ISO 9001 (quality management): 12 production sites, 16 sales
– ISO 14001 (environmental management): 6 production sites,
– ISO 50.001 (energy management): 1 production site
– OHSAS 18001 (occupational health & safety): 4 production
11 sales & service units
sites, 8 sales & service units
ties began to collaborate more closely last year. For a number of
Linde Material Handling continued the work that it had begun in
years now, the HSE managers at all production sites have met
2013 to implement a system for analysing environmental impact
annually for an international summit at which they discuss current
using lifecycle assessments. At the end of 2014, certified lifecycle
topics and share best practice. In 2014, a summit for the HSE
assessment studies were available for seven product clusters.
We keep the world moving.KION GROUP AG | Annual Report 2014
112
A project was also launched to implement a sustainability report-
Furthermore, all KION Group brands acknowledge their
ing system and an internal sustainability policy was issued.
responsibilities as corporate citizens. This is demonstrated by
Energy efficiency is one of the major areas of focus when it
the fact that both the Executive Board and employees person-
comes to the ongoing development of products. Electric-drive
ally support numerous different environmental and charitable
variants were developed for further models in 2014. STILL now
projects in different countries. One example is LMH’s donation
includes its Blue-Q energy-saving programme in all new trucks as
to the Spessart Hills Nature Park in connection with a sales
standard.
campaign in Germany for the new EVO diesel truck. Five oaks
Checking compliance with minimum social standards and
were planted for every truck sold. Many of the oak seedlings
human rights is also becoming increasingly important in the pur-
were planted by interns and apprentices from the local LMH site
chasing function. To satisfy its own requirements and the wish of
under the guidance of an expert.
many big-ticket customers for end-to-end monitoring of the
The plant in Pune (India) held an environmental day in which
supply chain, the KION Group has developed a supplier policy
all employees including the management team took part. Employ-
that forms the basis for incorporating environmental and ethical
ees adopted the new trees that were planted during the day as a
stipulations into the supplier management process.
lasting, tangible reminder to look after the environment.
Events after the reporting date
On 12 February 2015, KKR and Goldman Sachs placed a further
4.8 million shares (4.9 per cent of KION shares) in the market. As
a result of this transaction, the free float increased again, from
47.7 per cent to 52.6 per cent. The proportion of shares held indi-
rectly by KKR and Goldman Sachs via Superlift Holding therefore
reduced from 18.8 per cent to 13.9 per cent.
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Events after the reporting date
Outlook, risk report and opportunity report
113
Outlook, risk report and opportunity report
OUTLOOK
assumptions, such as those relating to changes in the cost of
materials, the KION Group’s ability to command higher prices
from customers and movements in exchange rates.
Forward-looking statements
Expected macroeconomic conditions
The forward-looking statements and information given below are
In the opinion of the International Monetary Fund (IMF), the pace
based on the Company’s current expectations and assessments.
of global economic growth will pick up in 2015, although not as
Consequently, they involve a number of risks and uncertainties.
strongly as forecast previously. In its January outlook, the IMF
Many factors, several of which are beyond the control of the KION
expects the global economy to grow at a rate of 3.5 per cent and
Group, affect the Group’s business activities and profitability. Any
the eurozone at 1.2 per cent in 2015. Growth of 2.4 per cent is
unexpected developments in the global economy would result in
predicted for the industrial countries in 2015 compared with
the KION Group’s performance and profits differing significantly
1.8 per cent in 2014, with the United States as the biggest growth
from those forecast below. The KION Group does not undertake
driver. In view of slower growth in China and the anticipated
to update forward-looking statements to reflect subsequently
slump in Russia, growth in the emerging and developing coun-
occurring events or circumstances. Furthermore, the KION Group
tries is only expected to stay at around the same level of
cannot guarantee that future performance and actual profits
4.3 per cent. The forecast for economic conditions is based on
generated will be consistent with the stated assumptions and
the assumption that, alongside tightening public finances, mone-
estimates and can accept no liability in this regard.
tary policy will remain expansionary and geopolitical tensions will
Actual business performance may deviate from our forecasts
ease. Moreover, the IMF believes advantages created by low oil
due, among other factors, to the opportunities and risks described
prices will be offset by unfavourable factors worldwide.
here. Performance particularly depends on macro economic and
industry-specific conditions and may be negatively affected by
Expected sectoral conditions
increasing uncertainty or a worsening of the economic and political
situation.
Forecast for 2014
The overall market for industrial trucks will continue to depend
heavily on economic conditions in key sales markets, with the
level of capital investment and the growth in global trade being
particularly crucial. In 2014, the global market for industrial trucks
expanded by around 8 per cent, a slightly stronger rate than in the
The overall assessment of the financial situation compares the
previous year despite mixed economic conditions overall. This
forecasts included in the 2013 group management report and
increase was primarily driven by a recovery of demand in western
subsequent interim reports with actual performance in 2014.
Europe coupled with strong growth in China and North America.
Assumptions
Given the overall economic prospects and in anticipation of a
stable investment climate, the KION Group expects a further
increase, albeit moderate, in the worldwide market volume in
2015. Besides the predicted growth in the emerging markets of
The forecasts in this section are derived from the KION Group’s
Asia, the major factors will be stabilisation of the sales situation in
multiple-year market, business and financial plan, which is based
western Europe with sustained replacement and catch-up invest-
on certain assumptions. Market planning takes into account
ment plus healthy market conditions in North America. However,
macroeconomic and industry-specific performance, which is
risks are presented by the unstable geopolitical situation and the
described below. Business planning and financial planning are
related significant slowdown in Russia’s growth. This could have
based on expected market performance, but also draw on other
a negative impact on neighbouring countries in eastern Europe
We keep the world moving.KION GROUP AG | Annual Report 2014 114
and for the eurozone. In addition deflationary tendencies could
Expected financial position
dampen companies’ willingness to invest.
Market expectations also remain positive over the longer-
Having repaid the corporate bonds in an amount exceeding
term perspective. Based on current macroeconomic forecasts
€500 million using funds from the revolving credit facility and
and in view of the rise in global trade volumes, the KION Group
other bank loans, the KION Group was able to further optimise its
expects an average annual growth rate (in units) of about
funding structure last year and considerably decrease the level of
4 per cent for the global market over the next few years and does
interest payable in subsequent years. There was also a substan-
not expect there to be significant changes in the proportion of
tial reduction in net debt, which dropped to €811 million in 2014.
total revenue generated by each product segment.
In 2015, the KION Group plans to use free cash flow to lower
its net debt still further.
Expected business situation and financial
performance
Overall statement on expected performance
By continuing with the implementation of its Strategy 2020, the
The basis for the long-term success of the KION Group is the
KION Group intends to achieve even better results in 2015 than
strong position occupied by its global and regional brands in
the record figures reported for 2014.
western Europe and the emerging markets. The global brands
Based on the forecasts for market conditions, the KION
Linde Material Handling and STILL, in particular, safeguard their
Group expects both order intake and consolidated revenue to be
technology leadership and underline their status as premium
slightly higher than in 2014. The growth in consolidated revenue
brands by maintaining high levels of capital expenditure and R&D
will continue to be underpinned by a strong contribution from the
spending.
service business in western Europe and the emerging markets in
By pursuing its Strategy 2020 and other measures, the
2015.
KION Group is expecting profitable growth for 2015 overall and
The KION Group also expects a slight year-on-year rise in
aims to achieve a sustained improvement in its market position
adjusted EBIT in 2015. Costs resulting from implementation of the
worldwide.
Strategy 2020 will have to be factored in, which should lead to a
sustained improvement in the EBIT margin in sub sequent years.
For this reason, the Group expects the adjusted EBIT margin for
2015 to remain at the record level reached in 2014. The forecast
is based on the assumption that material prices will remain stable.
The KION Group expects free cash flow in 2015 to be slightly
below the very high level achieved in the previous year. This is due
to increased capital expenditure on the one hand, and to higher
anticipated tax payments on the other.
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Outlook, risk report and opportunity report
115
RISK REPORT
Risk strategy
Group. His or her remit includes the definition and implementation
of standards to ensure that risks are captured and evaluated.
The risk management process is organised on a decentral-
ised basis. Firstly, a groupwide risk catalogue is used to capture
the risks attaching to each company. Each risk must be captured
individually. If the losses caused by a specific risk or the likelihood
The business activities of the KION Group necessarily involve
of this risk occurring exceed a defined limit, the KION Group’s
risk. Dealing responsibly with risk and managing it in a compre-
Executive Board and its Accounting & Finance function are noti-
hensive manner is an important element of corporate management.
fied immediately. Each risk is documented in an internet-based
The overarching aim is to fully harness business opportunities
reporting system designed specifically for the requirements of
while ensuring that risk always remains under control. Using its
risk management. Risks affecting more than one Group com-
groupwide risk management system, the KION Group contains all
pany, such as market risks, competition risks, financial risks and
identified risks by implementing suitable measures and takes
risks arising from financial services are not recorded individually
appropriate precautions. This ensures that the losses expected if
but are instead evaluated at Group level. Consequently, such
these risks arise will be largely covered and therefore will not
risks are not quantified.
jeopardise the Company’s continuation as a going concern.
The scope of consolidation for risk management purposes is
At the KION Group, risk management has always been
the same as the scope of consolidation for the consolidated
embedded in the Accounting & Finance function and now plays
financial statements. The risks reported by the individual compa-
an active and wide-ranging role due to the strategic focus of
nies are combined to form divisional risk reports as part of a rig-
Accounting & Finance. The operational units’ business models,
orous reporting process. To this end, minuted risk management
strategic perspectives and specific plans of action are examined
meetings are held once a quarter. Moreover, material risks are
systematically.
Principles of risk management
discussed with the segments at the business review meetings.
The divisional risk reports are then used to compile an aggregate
risk portfolio for the KION Group as a whole. To support this, the
relevant departments of the holding company are consulted each
quarter in order to identify and assess risk – particularly Company-
To ensure that the risk management systems are fully integrated
wide, cross-brand risk affecting areas such as treasury, purchas-
into the KION Group’s overall financial planning and reporting
ing, tax, human resources and financial services. The Executive
process, they are located in the Group Accounting & Finance
Board of KION GROUP AG and the Supervisory Board’s Audit
function.
Committee are informed of the Group’s risk position once a
The procedures governing the KION Group’s risk manage-
quarter. The Internal Audit department audits the risk manage-
ment activities are laid down in internal risk guidelines. For certain
ment system at regular intervals.
types of risk, such as financial risk or risks arising from financial
services, the relevant departments also have guidelines that are
specifically geared to these matters and describe how to deal
with inherent risks. Risk management is organised in such a way
that it directly reflects the structure of the Group itself. Conse-
quently, risk officers supported by risk managers have been
appointed for each company and each division. A central Group
risk manager is responsible for the implementation of risk man-
agement processes in line with procedures throughout the
We keep the world moving.KION GROUP AG | Annual Report 2014 116
Material features of the internal control and
risk management system pertaining to the
(Group) accounting process
Principles
The employees involved in the Group’s accounting process
receive regular training in this field. Throughout the accounting
process, the local companies are supported by central points of
contact. The consolidated accounts are drawn up centrally using
data from the consolidated subsidiaries. A consolidation depart-
ment with specially trained employees carries out the consolida-
The main objectives of the special accounting-related internal
tion activities, reconciliations and monitoring of the stipulated
control system are to avoid the risk of material misstatements in
deadlines and processes. Monthly checklists have been drawn
financial reporting, to identify material mismeasurement and to
up for the consolidation process and are worked through in a
ensure compliance with the applicable regulations and internal
standardised manner. All postings are managed centrally and
instructions. This includes verifying that the consolidated financial
documented. This team also monitors the system-based controls
statements and group management report comply with the rele-
and supplements them with manual checks. The entire account-
vant accounting standards. There can, however, be no absolute
ing process contains a number of specific approval stages, for
certainty that these objectives are achieved in full and at all times.
which extensive plausibility checks have been set up. Employees
with the relevant expertise provide support on specialist ques-
Material processes and controls in the
tions and complex issues. The central Internal Audit department
(Group) accounting process
also checks, among other things, the reliability of the accounting
work by the subsidiaries in Germany and abroad. It focuses pri-
For its (Group) accounting process, the KION Group has
marily on the following aspects:
defined suitable structures and processes within its internal
control and risk management system and implemented them
in the organisation.
Changes to the law, accounting standards and other pro-
nouncements are continually analysed with regard to their rele-
vance and effect on the consolidated financial statements and
group management report; the relevant changes are then incor-
porated into the Group’s internal policies and systems.
All consolidated entities must follow the KION GROUP IFRS
Executive Board, other policies and internal instructions;
– compliance with legal requirements, directives from the
– integrity and effectiveness of the internal control systems for
– correct performance of tasks and compliance with business
– correctness of the accounting (and of the financial reporting
avoiding financial losses;
principles;
that is based on the accounting) in terms of form and sub-
Accounting Manual when preparing their IFRS reporting pack-
stance.
ages. This manual contains the recognition, measurement and
disclosure rules to be applied in the KION Group’s accounting in
Internal control mechanisms and ongoing analysis of the regu-
accordance with IFRS. The accounting guidelines primarily
latory framework enable any risks that might jeopardise com-
explain the financial reporting principles specific to the KION
pliance of the consolidated financial statements and group
Group’s business. In addition, all companies must adhere to the
management report with accounting standards to be identified
schedule defined by head office for preparing the consolidated
as soon as possible so that appropriate countermeasures can
financial statements and group management report.
be taken. Such risks form part of the KION Group’s aggregate
The accounting-based internal control and risk manage-
risk profile and are classified as operational risk.
ment system encompasses defined control mechanisms, auto-
mated and manual reconciliation processes, separation of func-
tions, the double-checking principle and adherence to policies
and instructions.
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Outlook, risk report and opportunity report
117
Risks
Aggregate risk
The market risks and competition risks described, the risks along
the value chain, the human resources risks and the legal risks
largely relate to the LMH and STILL segments. By contrast, risks
arising from financial services mainly affect the Financial Services
In 2014, the aggregate risk position was largely unchanged com-
segment, while financial risks would predominantly impact on the
pared with the previous year. With regard to 2015, the risks in the
Other segment.
risk matrix below will be continually observed and evaluated in
terms of their extent and probability of occurrence. For example,
Market risks and competition risks
we consider the probability of market risk materialising as low
because of the fairly positive market expectations. However, the
Market risks
possible impact of market risk continues to be rated at a medium
Market risk can arise when the economy as a whole or a particu-
risk level because of the importance of the market for the KION
lar sector does not perform as well as had been anticipated in the
Group’s business situation and financial performance. As things
outlook. Cyclical fluctuations in macroeconomic activity affect the
stand at present, there are no indications of any risks that could
market for industrial trucks. Customers’ decisions on whether to
jeopardise the Company’s continuation as a going concern.
invest, particularly in new trucks, depend to a large degree on the
> DIAGRAM 005
Risk matrix
macroeconomic situation and conditions in their particular sector.
During an economic downturn, customers tend to postpone their
purchases of new trucks. Although demand for services is less
DIAGRAM 005
cyclical, it correlates with the degree of utilisation in the truck
H
G
H
I
L
E
V
E
L
K
S
I
R
I
M
U
D
E
M
• Market risk
• Procurement risk
• Production risk
W
O
L
• Competition risk
• R&D risk
• IT risk
• Financial risk
• Risk arising from
financial services
• Human resources risk
• Sales risk
• Legal risk
fleet – which usually declines during difficult economic periods.
As the KION Group can only adjust its fixed costs to fluctuations
in demand to a limited extent, reductions in revenue impact on
earnings.
Despite the KION Group’s strong growth in emerging mar-
kets and, prospectively, North America, the proportion of revenue
it earns in the eurozone remains high. As a result, the market con-
ditions that prevail there impact significantly on the KION Group’s
financial performance. Although the economic situation has
stabilised somewhat, the eurozone remains susceptible to dis-
ruption. Doubts surrounding the stability of the financial system
and the ability of the single currency to survive have not been
allayed, either. Overall, these factors could reduce eurozone
customers’ willingness to invest and consequently the demand
for the KION Group’s products.
Slower than forecast macroeconomic growth in emerging
markets could also have a negative impact on global trade vol-
umes and thus on growth in the material handling market. The
market risks referred to could be heightened by geopolitical risk,
LOW
MEDIUM
HIGH
possible currency crises and deflationary tendencies.
PROBABILITY OF OCCURRENCE
HIGH RISK
MEDIUM RISK
LOW RISK
Various measures aimed at making cost structures more
flexible – such as the consolidation of production facilities and the
global platform strategy – help to contain the earnings risk arising
We keep the world moving.KION GROUP AG | Annual Report 2014
118
from reductions in revenue caused by economic conditions.
It is also conceivable that competitors will join forces and
Diversification of the customer base in terms of industry and
their resulting stronger position will be detrimental to the KION
region as well as expansion of service activities also play a role in
Group’s sales opportunities. Moreover, predictions of higher
mitigating risk. Moreover, the KION Group closely monitors the
volumes and margins may lead to overcapacity, which would put
market and its competitors so that it can identify market risks at
increased pressure on prices.
an early stage and adjust its production capacities in good time.
Although the KION Group’s strengths in the premium seg-
Besides global economic growth, the KION Group also analyses
ment have enabled it to charge appropriate prices until now, it is
exchange rates, price stability, the consumer and investment cli-
taking a variety of steps to contain competition risk. Alliances,
mate, foreign trade activity and political stability in its key sales
partnerships, acquisitions and other measures are playing an
markets. The risk management function continually analyses the
increasing role in improving the KION Group’s competitiveness in
possible impact of the situation in the eurozone on the Group’s
terms of resources, market access and product range. The steps
financial position and financial performance. In addition to ongo-
that the KION Group is taking to mitigate its competition risk also
ing screening and monitoring, the risk reports regularly include a
include making its plants more efficient and securing low-cost
separate assessment of the risks arising from the sovereign debt
sources of supply.
crisis.
The KION Group also continually evaluates its options for
Other risks arise as a result of constant changes in the
strengthening and consolidating its position in emerging markets,
Company’s political, legal and social environment. Because it
in particular through strategic partnerships, the creation of joint
operates in countries in which the political or legal situation is
ventures or acquisition of local manufacturers. One of the risks of
uncertain, the KION Group is exposed to the consequent risk of
such alliances and acquisitions is that the expected benefits will
government regulation, capital controls and expropriations. The
materialise only partly or not at all. For example, the organisa-
KION Group mitigates such strategic risks by, for example,
tional integration of new units can harm financial performance for
carry ing out in-depth market research, conducting thorough
a variety of reasons. It is also possible that a partner will collabo-
evaluation procedures to assess political and economic condi-
rate with competitors if exclusivity agreements are not in place.
tions and drafting contracts appropriately.
Competition risks
Risks along the value chain
Competition risk describes the risk that growing competitive
Research and development risks
pressure will prevent the KION Group from achieving its predicted
The KION Group’s market position and business performance
margins and market share. The markets in which the KION Group
depend to a large extent on its ability to remain a leading pro-
operates are characterised by strong competition, often price-
vider of technology. This requires the Group to continually
driven. Price competition is compounded by some manufacturers
develop products that meet customer expectations and comply
having cost advantages in production, sometimes due to the cur-
with changing regulatory and technological requirements. To
rency situation and sometimes because local labour costs are
this end, the KION Group must anticipate customers’ needs
lower. Competition is therefore fierce, particularly in the economy
and changing market conditions and has to quickly bring new
and volume price segments, and the impact is especially strong
products to market. If the Company does not succeed in doing
in emerging markets. Building on their local competitive strength,
this, its technological and competitive position could be com-
manufacturers in emerging markets are also looking for opportu-
promised in the long term.
nities to expand. Although the high quality expectations and ser-
The innovations developed by the KION Group are compre-
vice needs of customers in developed markets present a barrier
hensively protected by intellectual property rights, in particular
to growth for many of these manufacturers, this situation is likely
patents. Nevertheless, there is always the possibility that prod-
to intensify competitive pressures in future.
ucts or product components will be imitated. There is also a risk
that patent applications will not be successful.
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Outlook, risk report and opportunity report
119
The KION Group mitigates research and development risk
number of complaints could harm the KION Group’s positioning
by focusing firmly on customer benefit in its development of
in the price segments and sales markets that it serves and, as a
products on the basis of overarching modular and platform
result, could harm its financial situation.
strategies. Customer needs are incorporated into the develop-
To mitigate these risks, the KION Group carries out preven-
ment process on an ongoing basis by ensuring close collabora-
tive maintenance, implements fire protection measures, trains its
tion between sales and development units and taking account
staff and builds a pool of external suppliers. The Company has
of all region-specific requirements.
taken out a commercially appropriate level of insurance cover
Procurement risks
against loss. Quality assurance is a high priority throughout the
value chain and reduces possible quality-related risks arising
Procurement activities constitute a potential risk for the KION
from the products and services provided. The KION Group miti-
Group in terms of the lack of availability of parts and compo-
gates its quality-related risks significantly by applying rigorous
nents for logistical or quality reasons and the rising cost of raw
quality standards to its development activities, conducting strin-
materials, energy, base products and intermediate products. As
gent controls throughout the process chain and maintaining
a result, there is always the possibility that the KION Group will
close contact with customers and suppliers. To mitigate risks
face backlogs in the supply of individual raw materials and com-
resulting from any restructuring measures, the KION Group
ponents. KION obtains some of its key components, such as
undertakes such measures only after a comprehensive planning
combustion engines, tyres, high-performance forged and elec-
process and works closely with employee representatives to
tronic parts, from a limited number of core suppliers.
ensure HR measures are implemented with the minimum possi-
The risk of supply bottlenecks – for example in the event of a
ble social impact.
shortage of raw materials or financial difficulties at core suppliers –
cannot be ruled out in future. The KION Group mitigates this risk
Sales risks
through appropriate diversification of its supplier structure in the
The main sales risks – besides a drop in revenue caused by
context of a global procurement organisation. In addition, the
market conditions – result from dependence on individual cus-
supplier development department, which focuses on improving
tomers and sectors. For example, it is possible that customers
suppliers’ production processes, helps suppliers to ensure that
would postpone or cancel orders during a period of economic
their processes are cost-efficient and offer excellent quality.
difficulty. There have not been any significant cancellations in pre-
Price changes present another procurement-related risk. In
vious years, however. It is also conceivable that customers would
2014, around 26.5 per cent of the cost of materials for new trucks
face a liquidity shortfall and therefore be unable to fulfil their pay-
was directly influenced by changes in commodity prices. More-
ment obligations immediately or even at all. Currently, there is little
over, conditions in the commodity markets typically affect com-
dependence on individual sectors in the KION Group’s customer
ponent prices after a delay of three to six months. The KION
portfolio. The KION Group’s reliance on individual customers also
Group endeavours to pass on price increases to customers but
remains low. Its business is also highly diversified from a regional
cannot always do so entirely due to market pressures.
perspective. In addition, the KION Group supplies companies of
Production risks
all sizes. Experience has shown that the KION Group’s exposure
to the risk of possible payment defaults is low, but this risk can be
Production risks are largely caused by quality problems, possible
further mitigated by recovering any collateral.
operational disruptions or production downtime at individual
sites. In such cases, the KION Group’s closely integrated manu-
IT risks
facturing network presents a heightened risk to its ability to deliver
A high degree of interconnectedness between sites and with cus-
goods on time. There is also a risk that structural measures and
tomers and other companies means that the KION Group also
reorganisation projects will not be implemented owing to disrup-
relies on functioning IT systems. The KION Group undertakes
tion of production or strikes. Delays in delivery or a rise in the
ongoing further development of a reliable, extendable and flexible
We keep the world moving.KION GROUP AG | Annual Report 2014 120
IT system environment with the aim of countering any IT-related
Normally, at least 50 per cent of the currency risk related to the
risks that may arise from the failure of IT systems and IT infra-
planned operating cash flows of the local entities based on liquid-
structure. Internal IT resources are pooled in KION Information
ity planning is hedged by currency forwards in accordance with
Management Services GmbH, which has well-established pro-
the relevant guideline.
cesses for portfolio management and project planning and con-
Group Treasury rigorously complies with and monitors the
trol. Independent external audits are conducted to provide addi-
strict separation of functions between the front, middle and back
tional quality assurance. Various technical and organisational
offices. Each Group company’s liquidity planning is broken down
measures protect the data of the KION Group and its Group com-
by currency and incorporated into the KION Group’s financial
panies against unauthorised access, misuse and loss. These
planning and reporting process. Group Treasury checks the
measures include procedures to validate and log access to the
liquidity planning and uses it to determine the funding require-
Group’s infrastructure.
ments of each company.
Financial risks
The funding terms and conditions faced by the lenders
themselves (manifested, for example, in the payment of liquidity
premiums on interbank lending) may result in a future shortage
Group Treasury is responsible for ensuring that sufficient finan-
of lines of credit and/or increased financing costs for compa-
cial resources are always available for the KION Group’s interna-
nies. However, the Group currently does not expect any further
tional growth. The main types of financial risk managed by
changes in its lines of credit or any excessive increases in margins.
Group Treasury, including risks arising from funding instru-
Goodwill and the brands represented 34.2 per cent of total
ments, are liquidity risk, currency risk, interest-rate risk and
assets as at 31 December 2014 (31 December 2013: 34.7 per
counterparty risk. Credit risk consists solely of counterparty
cent). Pursuant to IFRS, these assets are not amortised and their
risks attaching to financial institutions. Risk management proce-
measurement depends, above all, on future expectations. If these
dures issued by Group Treasury stipulate how to deal with the
future expectations are not fulfilled, there is a risk that impairment
aforementioned risks.
losses will have to be recognised on these assets.
The KION Group further reduced its financial debt in the year
The individual Group companies directly manage counter-
under review. Long-term borrowing totalled €648.0 million as at
party risks involving customers. These counterparty risks have
31 December 2014 and comprised the corporate bond due to
not changed significantly, despite the financial crisis. Each indi-
mature in 2020 (€450.0 million) and the long-term portion of the
vidual Group company has established a credit management
revolving credit facility (€198.0 million), which expires in 2018/2019.
system for identifying customer-related counterparty risks at an
The unused, unrestricted loan facility stood at €841.0 million as at
early stage and initiating the necessary countermeasures. Analysis
31 December 2014. Risk arising out of the lending conditions that
of the maturity structure of receivables is an integral element of
have been agreed was not regarded as material as at 31 Decem-
monthly reporting.
ber 2014. It relates in particular to the restrictions in respect of
compliance with financial covenants and upper limits for certain
Risks arising from financial services
transactions and in respect of the obligation to submit special
regular reports. The KION Group complied with all the lending
The KION Group’s leasing business mean that it may be exposed
covenants in the reporting year.
to residual value risks from the marketing of trucks that are
The Company generally refers to credit ratings to manage
returned by the lessee at the end of a long-term lease and sub-
counterparty risk when depositing funds with a financial institution.
sequently sold or re-leased. Residual values in the markets for
The KION Group only uses derivatives to hedge underlying
used trucks are therefore constantly monitored and forecast. The
operational transactions; they are not used for speculative pur-
KION Group regularly assesses its aggregate risk position arising
poses. It is exposed to currency risk because of the high propor-
from financial services.
tion of its business conducted in currencies other than the euro.
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Outlook, risk report and opportunity report
121
The risks identified are immediately taken into account by
That is why the KION Group actively engages in HR work
the Company in the costing of new leases by recognising write-
aimed at identifying and developing young professionals with
downs or valuation allowances and adjusting the residual
high potential who already work for the Company and retaining
values. Risk-mitigating factors include the demand for used
them over the long term, thereby enabling succession planning
trucks, which stabilises the residual values of the KION Group’s
for key roles across the Group. The KION Group also positions
industrial trucks. The majority of the residual values have under-
itself in the external market as an employer of choice. This will
lying remarketing agreements that transfer any residual-value
enable it to make strategic additions to its portfolio of existing
risk to the leasing company. This had a positive impact on the
staff and, in this way, avert the risk of possibly losing expertise
financial results in 2014. Groupwide standards to ensure that
and thereby becoming less competitive.
residual values are calculated conservatively, combined with an
Any restructuring measures may result in a risk of strikes
IT system for residual-value risk management, reduce risk and
and reactions of other kinds by the workforce. As demonstrated
provide the basis on which to create the transparency required.
several times in the past, this risk is contained by collaborating
The KION Group mitigates its liquidity risk and interest-rate
closely with employee representatives and, if job losses are
risk attaching to financial services by ensuring that most of its
necessary, taking comprehensive steps to ensure they are
transactions and funding loans have matching maturities and by
achieved with the minimum possible social impact.
constantly updating its liquidity planning. Long-term leases are
The legal risks arising from the KION Group’s business are
primarily based on fixed-interest agreements. The credit facilities
typical of those faced by any company operating in this sector.
provided by various banks and an effective dunning process
The Group companies are a party in a number of pending law-
ensure that the Group has sufficient liquidity.
suits in various countries. The individual companies cannot
In order to exclude currency risk, the KION Group generally
assume with any degree of certainty that they will win any of the
funds its leasing business in the local currency used in each
lawsuits or that the existing risk provision in the form of insurance
market.
or provisions will be sufficient in each individual case. However,
Because of low default rates, counterparty risk has not been
the KION Group is not expecting any of these existing legal pro-
significant to date in the Group. The KION Group has not identi-
ceedings to have a material impact on its financial position or
fied any material changes between 2013 and 2014. The Group
financial performance. These lawsuits relate, among other things,
also mitigates any losses from defaults by its receipt of the pro-
to liability risks, especially as a result of legal action brought by
ceeds from the sale of repossessed trucks. In addition, receiv-
third parties because, for example, the Company’s products were
ables management has been improved by enhancing the dunning
allegedly faulty or the Company allegedly failed to comply with
process. The credit portfolio management system was updated
contractual obligations. Further legal risk may arise as a result of
during 2014. Besides the design of the business processes, it
the environmental restoration of sites that have been shut down in
also encompassed the risk management and control processes.
recent years, for example work required due to contamination.
Moreover, the KION Group offers the majority of financial ser-
Any damage to the environment may lead to legal disputes and
vices indirectly via selected financing partners that bear the risks
give rise to reputational risk.
of the finance transaction. As far as these financial services are
The Company has taken measures to prevent it from incur-
concerned, the KION Group bears the counterparty risk in under
ring financial losses as a result of these risks. Although legal dis-
5 per cent of cases.
putes with third parties have been insignificant both currently
and in the past, the Company has a centralised reporting sys-
Human resources risks and legal risks
tem to record and assist pending lawsuits. In addition to the
high quality and safety standards applicable to all users of the
The KION Group relies on having highly qualified managers and
Company’s products, with which it complies when it develops
experts in key roles. If they left, it could have a long-term adverse
and manufactures the products, it has also taken out the usual
impact on the Group’s prospects.
types of insurance to cover any third-party claims. These issues
We keep the world moving.KION GROUP AG | Annual Report 2014 122
are also tackled by teams whose members come from a variety
the KION Group’s position. Opportunities are divided into three
of functions. The aim of the teams is to identify and avoid risks,
categories:
for example the risks arising from inadequate contractual
Market opportunities describe the potential resulting from
arrangements. A further objective of this cooperation across
trends in the market and competitive environment and from the
functions is to ensure compliance with mandatory laws, regula-
regulatory situation.
tions and contractual arrangements at all times.
Strategic opportunities are based on implementation of the
Owing to the KION Group’s export focus, legal risk and
Group’s strategy. They may lead to positive effects that exceed
reputational risk arise due to the numerous international and
planning assumptions.
local export controls that apply. The Company mitigates these
Business-performance opportunities arise in connection with
risks with a variety of measures. Consequently, export controls
operational activities along the value chain, such as restructuring
are an important part of the compliance activities carried out by
or cost-cutting measures.
the Group companies.
OPPORTUNITY REPORT
Management of opportunities
Opportunity situation
Market opportunities
The economy as a whole may perform better than expected in
2015. In addition, circumstances may occur in the wider market
at any time – such as quality problems at competitors or the
Opportunity management, like risk management, forms a central
effects of consolidation – that boost demand for products from
part of the Company’s day-to-day management. Individual areas
the KION Group brands. New, unforeseen regulatory initiatives
of opportunity are identified within the framework of the strategy
could be launched, for example the tightening of health and
process. Opportunities are determined and managed on a decen-
safety regulations or emissions standards, that would push up
tralised basis in line with the Group strategy.
demand for premium products offered by the KION Group
There are monthly reports on the opportunity situation as
brands. Average prices for procuring commodities over the year
part of the regular Group reporting process. As a result, the KION
may be cheaper than anticipated.
Group is in a position to ascertain at an early stage whether mar-
Medium- to long-term market opportunities are presented, in
ket trends, competitive trends or events within the Group require
particular, by:
individual areas of opportunity to be re-evaluated. This may lead
to reallocation of the budgets earmarked for the realisation of
opportunities. Such decisions are made on the basis of the
potential of the opportunity, drawing on empirical values. There is
no management system for the evaluation of opportunities com-
parable to the system for risk management.
Categorisation of opportunities
By ‘opportunities’, we mean positive deviations from the expecta-
tions set out in the outlook relating to the economic situation and
– growing demand for intralogistics products and services as a
consequence of globalisation, industrialisation and fragmen-
tation of supply chains;
– high demand for replacement investments, especially in
– the trend towards outsourcing service functions to indus-
developed markets;
trial truck manufacturers and growth in demand for finance
solutions;
– increased use of trucks powered by electric motors – one of
the KION Group’s particular strengths.
We keep the world moving.KION GROUP AG | Annual Report 2014 GROUP MANAGEMENT REPORT
Outlook, risk report and opportunity report
123
Strategic opportunities
Business-performance opportunities
Strategic opportunities are presented, above all, by implementing
Business-performance opportunities primarily arise from ongo-
the Strategy 2020, which is described in detail on pages 78 to 80.
ing activities to modernise and streamline the KION Group’s
The positive impact of strategic activities is already largely
production facilities and from the worldwide integration of the
reflected in the expectations regarding the KION Group’s financial
production network. By investing in new locations, products can
performance in 2015. Nevertheless, the individual activities could
be assembled nearer to the markets in which they are to be
create positive effects that exceed expectations. There is also a
sold, economies of scale can be achieved across the Group and
possibility that new strategic opportunities that were not part of
synergies can be leveraged. Further development of the Group’s
the planning may arise over the course of the year, for example in
back-office services will also help to achieve these objectives.
the form of acquisitions and strategic partnerships.
The following may lead to an increase in profitability in the
The KION Group’s medium- to long-term strategic opportu-
medium term:
nities arise, in particular, from:
– a greater presence in the economy and volume price seg-
ments, particularly as a result of the systematic implemen-
tation of the groupwide platform strategy;
– strengthening of its market-leading position in core western
European markets by boosting its technological expertise
– ongoing efficiency increases at production sites may boost
– effective use of global development capacities within the
sales and improve the gross margin;
framework of an overarching modular and platform strategy
may create synergies and economies of scale.
and making greater use of shared modules;
– expansion of the service portfolio, including financial ser-
vices, at every stage of the product lifecycle, taking advan-
tage of the high number of trucks in use;
– harnessing of market potential in fast-growing regions by
– continued expansion of business in North America.
putting suitable production and sales structures in place;
We keep the world moving.KION GROUP AG | Annual Report 2014
CONSOLIDATED FINANCIAL STATEMENTS
Contents
125
Consolidated Financial
Statements
126
CONSOLIDATED INCOME STATEMENT
127
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
128
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
130
CONSOLIDATED STATEMENT OF CASH FLOWS
132
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
134
134
151
161
196
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Basis of presentation
Notes to the consolidated income statement
Notes to the consolidated statement of financial position
Other disclosures
238
AUDITORS’ OPINION
239
RESPONSIBILITY STATEMENT
KION GROUP AG | Annual Report 2014
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
D
N
O
I
T
A
M
R
O
F
N
I
L
A
N
O
I
T
I
D
D
A
E
126
Consolidated income statement
Consolidated income statement
in € million
Revenue
Cost of sales
Gross profit
Selling expenses
Research and development costs
Administrative expenses
Other income
Other expenses
Profit from at-equity investments
Earnings before interest and taxes
Financial income
Financial expenses
Net financial expenses
Earnings before taxes
Income taxes
Current taxes
Deferred taxes
Net income
Note
[8]
[9]
[10]
[11]
[12]
[13]
[14]
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
Earnings per share according to IAS 33 (in €)
[16]
Basic earnings per share
Earnings per share – diluted
TABLE 033
2013
4,494.6
– 3,255.2
1,239.4
– 538.2
– 113.6
– 290.0
121.7
– 46.7
1.7
374.2
48.5
– 268.4
– 219.8
154.3
– 15.9
– 59.0
43.1
138.4
138.8
– 0.4
1.69
1.69
2014
4,677.9
– 3,337.4
1,340.5
– 570.5
– 125.7
– 323.6
93.2
– 42.1
– 24.8
347.0
84.4
– 173.2
– 88.8
258.3
– 80.0
– 63.5
– 16.5
178.2
176.7
1.6
1.79
1.79
We keep the world moving.KION GROUP AG | Annual Report 2014
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated income statement
Consolidated statement of comprehensive income
127
Consolidated statement of
comprehensive income
Consolidated statement of comprehensive income
TABLE 034
in € million
Net income
Items that will not be reclassified subsequently to profit or loss
Gains / losses on employee benefits
thereof changes in unrealised gains and losses
thereof tax effect
Changes in unrealised gains and losses from at-equity investments
Items that may be reclassified subsequently to profit or loss
Impact of exchange differences
thereof changes in unrealised gains and losses
thereof realised gains (–) and losses (+)
Gains / losses on cash flow hedges
thereof changes in unrealised gains and losses
thereof realised gains (–) and losses (+)
thereof tax effect
Gains (–) and losses (+) from at-equity investments
thereof changes in unrealised gains and losses
Note
[28]
[37]
2014
178.2
– 143.0
– 138.3
– 199.0
60.6
– 4.7
30.3
34.9
32.2
2.8
– 4.7
– 8.0
1.5
1.9
0.1
0.1
2013
138.4
0.7
0.7
1.8
– 1.1
–
– 16.7
– 34.0
– 34.4
0.4
17.4
66.3
– 41.4
– 7.5
– 0.1
– 0.1
Other comprehensive loss
– 112.7
– 15.9
Total comprehensive income
Attributable to shareholders of KION GROUP AG
Attributable to non-controlling interests
65.5
63.8
1.7
122.5
123.1
– 0.6
We keep the world moving.KION GROUP AG | Annual Report 2014 128
Consolidated statement of financial position
Consolidated statement of financial position – Assets
in € million
Goodwill
Other intangible assets
Leased assets
Rental assets
Other property, plant and equipment
At-equity investments
Lease receivables
Other non-current financial assets
Deferred taxes
Non-current assets
Inventories
Trade receivables
Lease receivables
Current income tax receivables
Other current financial assets
Cash and cash equivalents
Current assets
Total assets
Note
[17]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[14]
[24]
[25]
[22]
[14]
[23]
[26]
TABLE 035
2013
1,494.7
934.0
251.9
461.2
499.4
138.6
308.8
51.7
295.5
2014
1,497.1
915.5
279.0
487.1
494.1
114.6
345.3
34.3
357.9
4,524.8
4,435.8
529.2
598.2
202.5
6.6
168.2
98.9
511.8
558.7
170.8
15.4
114.7
219.3
1,603.7
1,590.7
6,128.5
6,026.4
We keep the world moving.KION GROUP AG | Annual Report 2014
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of financial position
129
Consolidated statement of financial position – Equity and liabilities
TABLE 036
in € million
Subscribed capital
Capital reserve
Retained earnings
Accumulated other comprehensive loss
Non-controlling interests
Equity
Retirement benefit obligation
Non-current financial liabilities
Lease liabilities
Other non-current provisions
Other non-current financial liabilities
Deferred taxes
Non-current liabilities
Current financial liabilities
Trade payables
Lease liabilities
Current income tax liabilities
Other current provisions
Other current financial liabilities
Current liabilities
Note
[27]
[28]
[29]
[30]
[31]
[33]
[14]
[29]
[32]
[30]
[14]
[31]
[33]
2014
98.7
1,996.2
– 148.2
– 304.9
5.3
1,647.1
787.5
646.8
461.7
83.7
387.8
320.9
2013
98.7
2,223.2
– 524.9
– 192.0
5.0
1,610.0
560.1
971.1
403.7
77.8
392.1
306.2
2,688.3
2,711.1
262.9
564.6
246.0
31.3
84.4
603.9
1,793.0
227.5
550.5
213.3
27.7
110.3
576.0
1,705.3
Total equity and liabilities
6,128.5
6,026.4
We keep the world moving.KION GROUP AG | Annual Report 2014
130
Consolidated statement of cash flows
Consolidated statement of cash flows
TABLE 037
in € million
Earnings before interest and taxes
Amortisation, depreciation and impairment charges
of non-current assets
Other non-cash income (–) / expenses (+)
Gains (–) / losses (+) on disposal of non-current assets
Changes in leased assets (excluding depreciation)
and lease receivables / liabilities
Change in inventories
Change in trade receivables / payables
Cash payments for defined benefit obligations
Change in other provisions
Change in other operating assets / liabilities
Taxes paid
= Cash flow from operating activities
Cash payments for purchase of non-current assets
Cash receipts from disposal of non-current assets
Change in rental assets (excluding depreciation)
Dividends received
Acquisitions of subsidiaries, net of cash acquired
Divestments of subsidiaries, net of cash
Cash payments for sundry assets
= Cash flow from investing activities
Note
[15]
[18], [22], [30]
[24]
[25]
[28]
[31]
[35]
[35]
[35]
[19]
[5]
[35]
2014
347.0
367.2
50.0
6.4
– 66.5
– 9.0
– 25.4
– 20.4
– 17.6
23.1
– 51.0
603.8
– 133.1
7.7
– 183.4
8.1
0.0
4.6
– 1.5
– 297.8
2013 *
374.2
334.6
14.9
– 5.0
– 65.8
33.8
– 17.2
– 25.1
– 43.7
25.3
– 119.8
506.3
– 125.8
9.9
– 170.3
7.2
– 25.1
0.0
– 6.7
– 310.7
We keep the world moving.KION GROUP AG | Annual Report 2014 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flows
131
Consolidated statement of cash flows
(continued)
in € million
Capital contribution from shareholders for the carried out capital increase
Capital increase from issuing of employee shares
Acquisition of treasury shares
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Cash payments from changes in ownership interests
in subsidiaries without loss of control
Financing costs paid
Proceeds from borrowings
Repayment of borrowings
Interest income received
Interest paid
Cash receipts for other financing activities
= Cash flow from financing activities
Effect of foreign exchange rate changes on cash and cash equivalents
= Change in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
TABLE 037
2013 *
741.8
0.0
– 5.6
0.0
– 2.1
– 16.3
– 56.3
1,095.9
– 2,201.6
7.0
– 119.6
25.1
– 531.6
2014
0.0
2.7
– 1.5
– 34.5
– 1.6
– 2.8
– 6.6
1,375.2
– 1,676.4
6.2
– 88.7
0.0
– 428.1
1.8
– 7.0
– 120.4
– 343.0
219.3
98.9
562.4
219.3
Note
[35]
[27]
[35]
[35]
[35]
[35]
[35]
[35]
[35]
* Last year’s figures were adjusted due to a change in presentation, for details see ‘Other disclosures on Consolidated statement of cash flows’
We keep the world moving.KION GROUP AG | Annual Report 2014 132
Consolidated statement of changes in equity
Consolidated statement of changes in equity
in € million
Balance as at 01/01/2013
Effects from first-time adoption IAS 19R *
Balance as at 01/01/2013 (restated)
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Capital increase
Transaction costs
Dividends paid to non-controlling interests
Acquisition of treasury shares
Effects from the acquisition / disposal of
non-controlling interests
Balance as at 31/12/2013
Balance as at 01/01/2014
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Withdrawal from capital reserve
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Acquisition of treasury shares
Capital increase issuing of employee shares
Effects from the acquisition / disposal of
non-controlling interests
Changes from at-equity accounting
Other changes
Balance as at 31/12/2014
Contributions for
carrying out the
approved
capital increase
1,132.6
Capital
reserves
348.5
1,132.6
348.5
0.0
– 1,132.6
0.0
0.0
0.0
0.0
1,894.0
– 13.9
– 5.4
2,223.2
2,223.2
0.0
– 228.1
– 1.5
2.6
Note
Subscribed
capital
0.5
0.5
0.0
98.4
– 0.2
98.7
98.7
0.0
– 0.1
0.1
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
98.7
0.0
1,996.2
– 148.2
– 31.7
– 264.6
– 4.2
– 4.3
1,641.8
1,647.1
Accumulated other comprehensive income (loss)
Gains / losses
Equity attribu-
table to
Cumulative
on defined
Gains / losses
Gains / losses
shareholders
Non-
Retained
earnings
translation
adjustment
benefit
on cash flow
from equity
of KION
controlling
obligation
hedges
investments
GROUP AG
interests
– 32.8
– 32.8
– 33.7
– 33.7
– 130.4
3.4
– 127.0
0.7
0.7
– 66.5
– 126.3
– 66.5
– 126.3
34.8
34.8
– 138.3
– 138.3
– 16.9
– 16.9
17.4
17.4
0.5
0.5
– 4.8
– 4.8
0.4
0.4
– 0.1
– 0.1
0.3
0.3
– 4.6
– 4.6
– 647.7
– 3.0
– 650.7
138.8
138.8
– 13.0
– 524.9
– 524.9
176.7
176.7
228.1
– 34.5
9.7
– 3.2
654.2
0.3
654.5
138.8
– 15.7
123.1
859.9
– 13.9
0.0
– 5.6
– 13.0
1,605.0
1,605.0
176.7
– 112.9
63.8
0.0
– 34.5
0.0
– 1.5
2.7
0.0
9.7
– 3.2
Total
660.3
0.3
660.7
138.4
– 15.9
122.5
859.9
– 13.9
– 2.1
– 5.6
– 11.4
1,610.0
1,610.0
178.2
– 112.7
65.5
0.0
– 34.5
– 1.6
– 1.5
2.7
0.1
9.7
– 3.2
6.2
0.0
6.2
– 0.4
– 0.2
– 0.6
0.0
0.0
– 2.1
0.0
1.6
5.0
5.0
1.6
0.2
1.7
0.0
0.0
0.0
0.0
0.1
0.0
0.0
5.3
– 1.6
* Adjusted due to the retrospective application of IAS 19R (2011), for details see also ‘Note [7] Accounting policies in the 2013 consolidated statements’
We keep the world moving.KION GROUP AG | Annual Report 2014 CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in equity
133
Consolidated statement of changes in equity
in € million
Balance as at 01/01/2013
Effects from first-time adoption IAS 19R *
Balance as at 01/01/2013 (restated)
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Capital increase
Transaction costs
Dividends paid to non-controlling interests
Acquisition of treasury shares
Effects from the acquisition / disposal of
non-controlling interests
Balance as at 31/12/2013
Balance as at 01/01/2014
Net income for the year
Other comprehensive income (loss)
Comprehensive income (loss)
Withdrawal from capital reserve
Dividend of KION GROUP AG
Dividends paid to non-controlling interests
Acquisition of treasury shares
Capital increase issuing of employee shares
Effects from the acquisition / disposal of
non-controlling interests
Changes from at-equity accounting
Other changes
Balance as at 31/12/2014
Contributions for
carrying out the
Subscribed
approved
Note
capital
capital increase
Capital
reserves
348.5
1,132.6
1,132.6
348.5
0.5
0.5
0.0
98.4
– 0.2
98.7
98.7
0.0
– 0.1
0.1
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
[27]
0.0
– 1,132.6
0.0
0.0
0.0
0.0
1,894.0
– 13.9
– 5.4
2,223.2
2,223.2
0.0
– 228.1
– 1.5
2.6
Accumulated other comprehensive income (loss)
Cumulative
translation
adjustment
Gains / losses
on defined
benefit
obligation
Gains / losses
on cash flow
hedges
Gains / losses
from equity
investments
Equity attribu-
table to
shareholders
of KION
GROUP AG
Non-
controlling
interests
Retained
earnings
– 647.7
– 3.0
– 650.7
138.8
138.8
– 13.0
– 524.9
– 524.9
176.7
176.7
228.1
– 34.5
9.7
– 3.2
– 32.8
– 32.8
– 33.7
– 33.7
– 130.4
3.4
– 127.0
0.7
0.7
– 66.5
– 126.3
– 66.5
– 126.3
34.8
34.8
– 138.3
– 138.3
– 16.9
– 16.9
17.4
17.4
0.5
0.5
– 4.8
– 4.8
0.4
0.4
– 0.1
– 0.1
0.3
0.3
– 4.6
– 4.6
654.2
0.3
654.5
138.8
– 15.7
123.1
859.9
– 13.9
0.0
– 5.6
– 13.0
1,605.0
1,605.0
176.7
– 112.9
63.8
0.0
– 34.5
0.0
– 1.5
2.7
0.0
9.7
– 3.2
TABLE 038
Total
660.3
0.3
660.7
138.4
– 15.9
122.5
859.9
– 13.9
– 2.1
– 5.6
– 11.4
1,610.0
1,610.0
178.2
– 112.7
65.5
0.0
– 34.5
– 1.6
– 1.5
2.7
0.1
9.7
– 3.2
1,647.1
6.2
0.0
6.2
– 0.4
– 0.2
– 0.6
0.0
0.0
– 2.1
0.0
1.6
5.0
5.0
1.6
0.2
1.7
0.0
0.0
– 1.6
0.0
0.0
0.1
0.0
0.0
5.3
* Adjusted due to the retrospective application of IAS 19R (2011), for details see also ‘Note [7] Accounting policies in the 2013 consolidated statements’
98.7
0.0
1,996.2
– 148.2
– 31.7
– 264.6
– 4.2
– 4.3
1,641.8
We keep the world moving.KION GROUP AG | Annual Report 2014 134
Notes to the consolidated financial statements
Basis of presentation
[1] GENERAL INFORMATION ON
THE COMPANY
income statement. The items concerned are disclosed and
explained separately in the notes. Assets and liabilities are broken
down into current and non-current items in accordance with
IAS 1.60. The consolidated income statement is prepared in
accordance with the cost of sales (function-of-expense) method.
KION GROUP AG, whose registered office is at Abraham- Lincoln-
The consolidated financial statements are prepared in euros,
Strasse 21, 65189 Wiesbaden, is entered in the commercial reg-
which is the Group’s functional currency and reporting currency.
ister at the Wiesbaden local court under reference HRB 27060.
All amounts are disclosed in millions of euros (€ million) unless
The KION Group is a leading global supplier of industrial
stated otherwise. The addition of the totals presented may result
trucks (forklift trucks and warehouse trucks). It generated
in minor rounding differences. The percentages shown are
revenue of €4,677.9 million in the 2014 financial year from its
calculated on the basis of the respective amounts, rounded to the
Linde, Fenwick, STILL, OM STILL, Baoli and Voltas brands (2013:
nearest thousand euros. The separate financial statements of the
€4,494.6 million).
subsidiaries included in the consolidation were prepared as at
The consolidated financial statements and the group
the same reporting date as the annual financial statements of
manage ment report were prepared by the Executive Board of
KION GROUP AG.
KION GROUP AG on 10 March 2015.
[2] BASIS OF PREPARATION
The consolidated financial statements of the KION Group for the
financial year ended 31 December 2014 have been prepared in
accordance with section 315a of the German Commercial Code
(HGB) in conjunction with the International Financial Reporting
Standards (IFRSs) of the International Accounting Standards
Board (IASB) applicable as at the reporting date as well as the
associated interpretations (IFRICs) of the IFRS Interpretations
Committee (IFRS IC) as adopted by the European Union in
Financial reporting standards to be adopted
for the first time in the current financial year
The following financial reporting standards were adopted for the
first time in 2014:
– IFRS 10 ‘Consolidated Financial Statements’
– IFRS 11 ‘Joint Arrangements’
– IFRS 12 ‘Disclosure of Interests in Other Entities’
– Transition Guidance (Amendments to IFRS 10, IFRS 11 and
– Amendments to IFRS 10 ‘Consolidated Financial Statements’,
IFRS 12)
IFRS 12 ‘Disclosure of Interests in Other Entities’ and IAS 27
accordance with Regulation (EC) No. 1606 / 2002 of the European
‘Separate Financial Statements’: amendments relating to the
Parliament and of the Council concerning the application of inter-
national accounting standards. All of the IFRSs and IFRICs that
had been enacted by the reporting date and that were required to
be applied in the 2014 financial year have been applied in
pre paring the consolidated financial statements.
In order to improve the clarity of presentation, certain items
are aggregated in the statement of financial position and the
consolidation of investment entities
– IAS 27R ‘Separate Financial Statements’
– IAS 28R ‘Investments in Associates and Joint Ventures’
– Amendments to IAS 32 ‘Financial Instruments: Presentation’:
offsetting of financial assets and financial liabilities
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
135
Basis of presentation
– Amendments to IAS 39 ‘Financial Instruments: Recognition
and Measurement’: amendments relating to the novation of
– Amendments to IAS 27 ‘Separate Financial Statements’:
amendments relating to the application of the equity method
derivatives and continuation of hedge accounting.
for subsidiaries, joint ventures and associates in separate
The first-time adoption of these standards has had no significant
effect on presentation of the financial performance, financial
position or notes to the financial statements of the KION Group.
financial statements
– IFRIC 21 ‘Levies’
– Annual Improvements to IFRSs (2010–2012)
– Annual Improvements to IFRSs (2011–2013)
– Annual Improvements to IFRSs (2012–2014).
Financial reporting standards released
but not yet adopted
These standards and interpretations are expected to be applied
by the entities included in the KION Group only from the date on
which they must be adopted for the first time. Their effects on the
In its consolidated financial statements for the year ended
financial performance and financial position of the KION Group
31 December 2014 the KION Group has not applied the following
are still being analysed.
standards and interpretations, which have been issued by the
IASB but are not yet required to be adopted in 2014:
– IFRS 9 ‘Financial Instruments’
– Amendments to IFRS 10 ‘Consolidated Financial Statements’,
IFRS 12 ‘Disclosure of Interests in Other Entities’ and IAS 28
[3] PRINCIPLES OF CONSOLIDATION
‘Investments in Associates and Joint Ventures’, clarification
Acquisitions are accounted for using the acquisition method. In
relating to application of the consolidation exception for
accordance with IFRS 3, the identifiable assets and the liabilities
investment entities
– Amendments to IFRS 10 ‘Consolidated Financial Statements’
and IAS 28 ‘Investments in Associates and Joint Ventures’:
assumed on the acquisition date are recognised separately from
goodwill, irrespective of the extent of any non-controlling inter-
ests. The identifiable assets acquired and the liabilities assumed
amendments relating to the sale or contribution of assets
are measured at their fair value.
between an investor and its associate or joint venture
relating to the acquisition of interests in joint operations
– Amendments to IFRS 11 ‘Joint Arrangements’: clarification
– IFRS 14 ‘Regulatory Deferral Accounts’
– IFRS 15 ‘Revenue from Contracts with Customers’
– Amendments to IAS 1 ‘Presentation of Financial Statements’:
– Amendments to IAS 16 ‘Property, Plant and Equipment’ and
amendments in connection with the disclosure initiative
IAS 38 ‘Intangible Assets’: clarification relating to revenue-
based depreciation and amortisation
– Amendments to IAS 16 ‘Property, Plant and Equipment’ and
IAS 41 ‘Agriculture’: amendments relating to the accounting
for bearer plans
– Amendments to IAS 19 ‘Employee Benefits’: defined benefit
plans: employee contributions
The amount recognised as goodwill is calculated as the
amount by which the acquisition cost, the amount of non-
controlling interests in the acquiree and the fair value of all
previously held equity interest at the acquisition date exceeds the
fair value of the acquiree’s net assets. If the cost of acquisition is
lower than the fair value of the acquiree’s net assets, the differ-
ence is recognised in income.
For each acquisition, the Group decides on a case-by-case
basis whether the non-controlling interest in the acquiree is
recognised at fair value or as a proportion of the net assets of the
acquiree. The option to recognise non-controlling interests at fair
value is not currently exercised. Consequently, non-controlling
interests are recognised at the proportionate value of the net
assets attributable to them excluding goodwill.
We keep the world moving.KION GROUP AG | Annual Report 2014 136
In the case of business combinations in stages, previously held
equity interests are recognised at their fair value at the acquisi-
tion date. The difference between their carrying amount and fair
value is recognised in the consolidated income statement.
[4] BASIS OF CONSOLIDATION
For the purpose of impairment testing, goodwill is allocated
KION GROUP AG’s equity investments include subsidiaries, joint
to cash-generating units that are likely to benefit from the busi-
ventures, associates and financial investments.
ness combination.
In addition to KION GROUP AG, the consolidated financial
Transaction costs are immediately taken to income. Contin-
statements of the KION Group include, using the acquisition
gent consideration elements are included at fair value at the date
method, all material subsidiaries over which KION GROUP AG
of acquisition when determining the purchase consideration.
exercises control. KION GROUP AG controls a subsidiary if it has
Contingent consideration elements may consist of equity instru-
decision-making power over the main activities of the entity and
ments or financial liabilities. Depending on the category, changes
can use this power to affect the amount of the variable returns to
in their fair value are included in subsequent measurements.
which it is exposed as a result of the equity investment. Subsidi-
The consolidated financial statements include all of the
aries acquired in the course of the financial year are consolidated
parent company’s material subsidiaries. Intragroup balances,
from the date on which control is obtained. Companies sold in the
transactions, income and expenses, and gains and losses on
course of the financial year are deconsolidated from the date on
intercompany transactions are eliminated in full. Deferred taxes
which control is lost.
are recognised on temporary differences arising from consoli-
A joint venture is an equity interest in which the entity is jointly
dation transactions.
managed by companies in the KION Group and one or more
Transactions with non-controlling interests are treated as
partners on the basis of a contractual agreement, and these
transactions with the Group’s equity providers. Differences
parties have rights to the net assets of the joint venture.
between the consideration paid for the acquisition of a non-
Associates are entities in which companies in the KION Group
controlling interest and the relevant proportion of the carrying
are able to exercise significant influence, either directly or
amount of the subsidiary’s net assets are recognised in equity.
indirectly, over the financial and operating policies of the entity
Gains and losses arising from the sale of non-controlling
concerned. Significant influence is assumed when KION GROUP
interests are also recognised in equity, provided there is no
AG holds between 20 per cent and 50 per cent of the voting rights.
change in control.
All other equity interests over which KION GROUP AG is
Associates and joint ventures that are of material importance
unable to exercise control or a significant influence, or that are not
to the presentation of the financial position and financial per-
jointly controlled by KION GROUP AG, are classified as financial
formance of the KION Group are accounted for using the equity
investments. Financial investments are not consolidated.
method.
The number of equity investments broken down by category
is shown in > TABLE 039
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
137
Basis of presentation
Shareholdings by categories
TABLE 039
Consolidated subsidiaries
Domestic
Foreign
At-equity investments in Joint Ventures
and Associates
Domestic
Foreign
Subsidiaries and financial investments
at amortised cost
Domestic
Foreign
01/01/2014
Additions
Disposals
31/12/2014
99
22
77
8
6
2
53
13
40
–
–
–
2
–
2
4
1
3
3
1
2
1
1
–
5
1
4
96
21
75
9
5
4
52
13
39
A total of 21 German (2013: 22) and 75 foreign (2013: 77) sub-
52 (2013: 53) companies with minimal business volumes or
sidiaries were fully consolidated in addition to KION GROUP AG
no business operations were not included in the consolidation.
as at 31 December 2014.
The unconsolidated subsidiaries and the joint ventures and
Three subsidiaries were deconsolidated in 2014. Information
associates not accounted for using the equity method are of
on the disposal of one subsidiary can be found in note [5].
minor importance to the presentation of the financial position
Nine joint ventures and associates were accounted for under
and financial performance of the KION Group, both individually
the equity method as at 31 December 2014 (31 December 2013:
and as a whole.
eight). Two equity investments have been accounted for using the
Where other requirements are met, the following fully con-
equity method since 1 January 2014 owing to their increased
solidated companies are exempt from the requirement to prepare
financial significance. One insignificant equity investment is now
annual financial statements and management reports in accord-
accounted for at cost rather than using the equity method. In
ance with sections 264 (3) and 264b HGB on account of their
each case, measurement under the equity method was performed
inclusion in the consolidated financial statements: > TABLE 040
on the basis of the last available annual financial statements.
We keep the world moving.KION GROUP AG | Annual Report 2014
138
German entities exempted from disclosure requirements
KION Holding 2 GmbH
Klaus Pahlke GmbH & Co. Fördertechnik KG
Schrader Industriefahrzeuge GmbH & Co. KG
LMH Immobilien GmbH & Co. KG
LMH Immobilien Holding GmbH & Co. KG
TABLE 040
Head office
Wiesbaden
Haan
Essen
Aschaffenburg
Aschaffenburg
A detailed overview of all the direct and indirect shareholdings of
KION GROUP AG is shown in the list of shareholdings (note [45]).
[6] CURRENCY TRANSLATION
[5] DISPOSAL OF SUBSIDIARIES
Financial statements in foreign currencies are translated in
accordance with the functional currency concept (IAS 21 ‘The
Effects of Changes in Foreign Exchange Rates’). The functional
currency is the currency of the primary economic environment in
The KION Group sold the entirety of its controlling interest in
which an entity operates. The modified closing-rate method is
Willenbrock Arbeitsbühnen GmbH & Co. KG (referred to below
used for currency translation.
as Willenbrock Arbeitsbühnen) and deconsolidated it with effect
The assets and liabilities of foreign subsidiaries, including
from 16 December 2014. Before that, the KION Group had held a
goodwill, are translated at the middle spot exchange rate, i.e. at
74 per cent stake in Willenbrock Arbeitsbühnen indirectly through
the average of the bid or offer rates on the reporting date. Income
Willenbrock Fördertechnik Holding GmbH. A shareholder loan
and expenses are translated at the average rate. With the excep-
was also transferred in connection with the disposal. The pur-
tion of income and expenses recognised as other comprehensive
chase price for the shares and the loan amounted to €4.6 million
income (loss), equity is recognised at historical rates. The
and was paid entirely in cash.
resulting translation differences are not taken to income and
Assets totalling €16.0 million and liabilities totalling €13.1 mil-
are recognised in other comprehensive income (loss) until sub-
lion were eliminated as a result of the disposal. Most of these
sidiaries are disposed of.
assets (€14.0 million) constituted leased and rental assets, while
Transactions of the consolidated entities in foreign currencies
most of the liabilities (€11.5 million) were lease liabilities.
are translated into the relevant company’s functional currency at
The disposal of Willenbrock Arbeitsbühnen generated a profit
the rate prevailing on the transaction date. On the reporting date,
of €1.7 million, which was included in earnings before interest and
monetary items are translated at the closing rate and non-monetary
tax. The transfer of the shareholder loan of €5.0 million resulted in
items at the rate prevailing on the transaction date. Currency
a loss of €0.8 million, which was recognised in net financial
translation differences are taken to income and recognised in
expenses.
other income / expenses or in net financial income / expenses.
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
139
Basis of presentation
Major foreign currency rates in €
Australia (AUD)
Brazil (BRL)
Switzerland (CHF)
China (CNY)
United Kingdom (GBP)
Russia (RUB)
U.S.A. (USD)
Average rate
Closing rate
2014
1.4727
3.1209
1.2147
8.1914
0.8064
50.9191
1.3294
2013
1.3782
2.8706
1.2308
8.1659
0.8492
42.3328
1.3284
2014
1.4809
3.2152
1.2029
7.5085
0.7768
70.2294
1.2099
TABLE 041
2013
1.5414
3.2470
1.2276
8.3218
0.8302
45.2175
1.3746
The translation rates above were used for currencies that are
economic benefit will accrue to the entity and that it can be
material to the financial statements. > TABLE 041
reliably measured. Other criteria may arise, depending on each
[7] ACCOUNTING POLICIES
individual transaction, such as:
Sale of goods
With the exception of items classified as ‘sale with risk’, revenue
from the sale of goods is recognised when the KION Group
The accounting policies applied in these consolidated financial
delivers goods to a customer, the goods are accepted by the
statements are, besides the aforementioned accounting policies
customer and the flow of benefits to the Group is considered to
to be adopted for the first time in 2014, fundamentally the same
be probable. If a customer is expected to accept goods but has
as those used for the year ended 31 December 2013. These
yet to do so, the corresponding revenue is only recognised when
consolidated financial statements are based on the financial
the goods are accepted. Appropriate provisions are recognised
statements of the parent company and its consolidated sub-
for risks relating to the sale of goods. In the case of revenue from
sidiaries prepared in accordance with the standard accounting
agreements classified as ‘sale with risk’, the revenue is recog-
policies applicable throughout the KION Group.
nised pro rata over the term of the agreement. The term ‘sale with
risk’ and the corresponding revenue recognition are discussed in
the following section and under ‘Rental assets’ below.
Revenue recognition
Revenue is the fair value received for the sale of products and
services and rental and lease income (excluding VAT) after deduc-
tion of trade discounts and rebates. In accordance with IAS 18,
revenue is recognised when it is sufficiently probable that a future
We keep the world moving.KION GROUP AG | Annual Report 2014
140
Rendering of services
in the amount of the estimated cost at the date on which the
related product is sold.
Revenue from the rendering of services is recognised in the year
in which the services are rendered. For services provided over
several periods, revenue is recognised in accordance with the
Financial income and expenses
proportion of the total services rendered in each period (stage of
completion). Revenue from long-term service agreements is there-
Financial income and expenses mainly consist of interest
fore recognised on the basis of the average term of the service
expenses on financial liabilities, interest income from financial
agreements and in line with progressive costs (constant margin).
receivables, gains and losses on financial instruments recognised
Revenue from financial service transactions is recognised in
through profit or loss, exchange rate gains and losses on financial
the amount of the sales value of the leased asset if classified as
activities and the interest expenses on pension provisions. The
a finance lease and in the amount of the lease payments if classi-
expected return on plan assets relating to pension provisions is
fied as an operating lease. As part of the financial services
also included in financial income.
provided by the Group, industrial trucks are also sold to finance
Interest income and expenses are recognised in profit and
partners who then enter into leases directly with the end cus-
loss in accordance with the effective interest method. The effec-
tomer (‘indirect end customer finance’). If significant risks and
tive interest method is used for calculating the amortised cost of
rewards remain with the KION Group as a result of an agreed
a financial asset or financial liability and the allocation of interest
residual value guarantee that accounts for more than 10 per cent
income and interest expenses over the relevant periods. The
of the asset’s value or as a result of an agreed customer default
effective interest rate is the interest rate at which the estimated
guarantee (‘sale with risk’), the proceeds from the sale are
future incoming and outgoing payments (including all fees that
deferred and recognised as revenue on a straight-line basis
are part of the effective interest rate, transaction costs and other
over the term until the residual value guarantee or the default
premiums and discounts) are discounted to the net carrying
guarantee expires.
amount of the financial asset or liability over the expected term of
Interest income and royalties
Dividends are recognised in income when a resolution on
distribution has been passed. They are reported in the consoli-
Interest income is recognised pro rata temporis in accordance
dated income statement under other income, provided they are
with the effective interest method. Income from royalties is
dividends from subsidiaries carried at amortised cost.
the financial instrument.
deferred in accordance with the substance of the relevant agree-
ments and recognised pro rata temporis.
Information on the deferral of lease income is contained in the
Goodwill
disclosures on the accounting treatment of leases.
Cost of sales
Goodwill has an indefinite useful life and is not amortised. Instead,
it is tested for impairment in accordance with IAS 36 (‘Impairment
of Assets’) at least once a year, and more frequently if there are
indications that the asset might be impaired.
The cost of sales comprises the cost of goods and services sold
Impairment testing is performed at the level of the individual
and includes directly attributable material and labour costs as
cash-generating units (CGUs) or groups of CGUs. A CGU is
well as directly attributable overheads, including depreciation of
defined as the smallest identifiable group of assets that generates
production equipment and amortisation of certain intangible
cash inflows from continuing use that are largely independent of
assets, as well as write-downs of inventories. Cost of sales also
the cash inflows from other assets or groups of assets. CGUs are
includes additions to warranty provisions, which are recognised
generally based on the lowest level of an entity at which – for
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
141
Basis of presentation
internal management purposes – the management systematically
CGU cash flows are discounted using a weighted average
monitors and controls the contribution to earnings made by the
cost of capital (WACC) that reflects current market assessments
assets concerned, including goodwill. However, a CGU may not
of the specific risks to individual CGUs. The underlying capital
be larger than an operating segment as defined in IFRS 8
structure for the LMH and STILL CGUs is determined by com-
‘Operating Segments’. In particular, CGUs are considered to be
paring peer group companies in the same sector. The beta factor
clearly defined and independent if the entity’s management has
derived from the peer group was 1.09 (2013: 1.07). Yield curve
prepared independent forecasts relevant to decision-making for
data from the European Central Bank (three-month average,
the individual CGUs.
rounded) was used to determine the risk-free interest rate; as at
For the purposes of internal and external reporting, the
1 November 2014 the rate was 2.0 per cent (2013: 2.75 per cent).
activities of the KION Group are broken down into the LMH,
The market risk premium derived from empirical studies of the
STILL, Financial Services and Other segments on the basis of
capital markets was set at 6.75 per cent (2013: 5.75 per cent) and
their characteristics and risk profile. The 2014 forecast, the
was within the bandwidth recommended by the technical com-
budget for 2015, the medium-term planning for 2016 to 2017 and
mittee for business valuation and administration (FAUB) of the
the KION Group’s internal projections for 2018 to 2019 were
German Institute of Auditors (IDW), which is 5.5 per cent to
drawn up on the basis of this segment structure.
7.0 per cent. The market risk premium increased by 1.0 percent-
The relevant CGUs for the purposes of goodwill impairment
age point compared with 2013 owing to the decrease in the risk-
testing and the CGUs to which brand names have been allocated
free base rate from 2.75 per cent to 2.0 per cent. The inflation
are the LMH and STILL segments and the KION India Pvt. Ltd.,
forecast for Germany and the implied return on equity remained
Pune, India CGU (formerly Voltas Material Handling Pvt. Ltd.),
unchanged year on year at 1.75 per cent and 8.75 per cent
which is assigned to the Other segment. The Financial Services
respectively. The assumed country risk was 0.25 per cent for the
segment only generates a finance margin to cover costs and
LMH CGU (2013: 0.28 per cent) and 0.42 per cent for the STILL
consequently has almost no impact on cash flow and does not
CGU (2013: 0.45 per cent). A leverage ratio of 27.8 per cent (2013:
earn any material excess profit. As a result, no goodwill from the
25.4 per cent) was calculated based on the capital structure
original purchase price allocation (PPA) was allocated to this
determined for the peer group.
CGU when the new segment structure was defined in 2012 in
A leveraged beta of 1.09 (2013: 1.06) was used to determine
accordance with IAS 36.87.
the country-specific WACC for KION India. The risk-free interest
The recoverable amount of a CGU is determined by calcu-
rate for India as at 1 November 2014 was 7.4 per cent (2013:
lating its value in use on the basis of the discounted cash flow
8.9 per cent); the country-specific risk premium for India was set
method. The cash flows forecast for the next five years are
at 2.2 per cent (2013: 2.4 per cent). The WACC before tax, which
included in the calculation for the impairment test in accordance
is used to discount the estimated cash flows, was calculated at
with IAS 36.33(b). The financial forecasts are based on assump-
10.7 per cent for LMH (2013: 10.5 per cent), 10.9 per cent for
tions relating to the development of the global economy, com-
STILL (2013: 10.8 per cent) and 15.6 per cent (2013: 16.4 per cent)
modity prices and exchange rates. The budget for 2015, the
for KION India. The WACC after tax was 7.7 per cent for LMH
medium-term planning for 2016 to 2017 and the projections for
(2013: 7.7 per cent), 7.9 per cent for STILL (2013: 7.9 per cent) and
2018 to 2019 were used to determine the cash flows. Cash flows
14.1 per cent for KION India (2013: 14.9 per cent).
beyond the five-year planning horizon were extrapolated for the
The impairment test carried out in the fourth quarter of 2014
LMH and STILL CGUs using a growth rate of 1.0 per cent (2013:
did not reveal any need to recognise impairment losses for the
1.0 per cent). A growth rate of 5.0 per cent (2013: 5.0 per cent)
existing goodwill of the LMH, STILL and KION India CGUs. Based
was used for KION India Pvt. Ltd., Pune, India (referred to below
on the results of sensitivity analysis, we do not expect that sig-
as KION India) on a perpetuity basis to take account of forecast
nificant impairment losses will need to be recognised for goodwill,
trends for the high-growth market of India and the high level of
even if key assumptions vary within realistic limits.
inflation.
We keep the world moving.KION GROUP AG | Annual Report 2014 142
Other intangible assets
Capitalised development costs include all costs and overheads
directly attributable to the development process. Once they have
Other purchased intangible assets with a finite useful life are
been initially capitalised, these costs and internally generated
carried at cost less all accumulated amortisation and all accu-
intangible assets – particularly internally generated software – are
mulated impairment losses. If events or market developments
carried at cost less accumulated amortisation and accumulated
suggest impairment has occurred, impairment tests are carried
impairment losses. Internally generated intangible assets are not
out on the carrying amount of items classified as other intangible
qualifying assets so finance costs are not capitalised. All
assets with a finite useful life. The carrying amount of an asset is
non-qualifying development costs are expensed as incurred and
compared with its recoverable amount, which is defined as the
reported on the income statement under research and develop-
higher of its value in use and its fair value less costs to sell. If the
ment costs together with research costs and the amortisation on
reasons for recognising impairment losses in the past no longer
capitalised development costs.
apply, impairment losses not exceeding the amortised cost of the
Amortisation of intangible assets with a finite useful life is
assets are reversed.
recognised on a straight-line basis and reported under functional
Other intangible assets with an indefinite useful life are carried
costs. The impairment losses on intangible assets are reported
at cost and are mainly capitalised brand names. Brand names are
under other expenses.
not amortised because they have been established in the market
The following useful lives are applied in determining the
for a number of years and there is no foreseeable end to their
carrying amounts of other intangible assets: > TABLE 042
useful life. In accordance with IAS 36, they are tested for impair-
ment at least once a year or whenever there are indications that
the asset might be impaired. The impairment test is performed in
the same way as the impairment test for goodwill. Assessments
of indefinite useful life are carried out in every period.
The Voltas brand name at KION India, which is allocated to
the Other segment, is subject to a usage right with a contractually
limited term and it will therefore be amortised over its useful life.
Development costs are capitalised if the following can be
demonstrated:
– the technical feasibility of the intangible asset;
– the intention to complete the intangible asset and use or sell it;
– the ability to use or sell the intangible asset;
– the likelihood that the intangible asset will generate future
– the availability of adequate technical, financial and other
economic benefits;
resources to complete the development and to use or sell the
intangible asset; and
– the ability to reliably measure the expenditure attributable to
the intangible asset during its development.
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
143
Basis of presentation
Useful life of other intangible assets
Customer relationships / client base
Technology
Development costs
Patents and licences
Software
TABLE 042
Years
4 – 10
10
5 – 7
3 – 15
2 – 10
Leases / short-term rentals
Leased assets
KION Group entities lease equipment, mainly various industrial
If the economic ownership of leased assets remains with a KION
trucks, to their customers in order to promote sales. The leases
Group entity as the lessor under an operating lease, the assets
may be of a short-term nature (short-term rental) or long-term
are reported as leased assets in a separate item in the statement
nature (leasing).
of financial position. The leased assets are carried at cost and
Entities in the KION Group enter into leases as lessors and as
depreciated over the term of the underlying leases.
lessees. In line with IAS 17, these contracts are classified as
To fund leases, industrial trucks are generally sold to leasing
finance leases if substantially all of the risks and rewards inciden-
companies. The industrial trucks are then leased back to entities
tal to ownership of the leased / rental asset are transferred to the
in the KION Group (head lease), who sub-lease them to external
lessee. All other rentals and leases are classified as operating
end customers (described below as ‘sale and leaseback sub-
leases, again in accordance with IAS 17.
leases’). These long-term leases generally have a term of four to
If a KION Group entity enters into a finance lease as the
five years. If, in the case of sale and leaseback sub-leases, the
lessor, the future lease payments to be made by the lessee are
risks and rewards incidental to the head lease are substantially
recognised as lease receivables at an amount equal to the net
borne by KION Group entities and are not transferred to the end
investment in the lease. Interest income is allocated to each
customer, the corresponding assets are reported as non-current
reporting period in order to ensure a constant return on the out-
leased assets. However, if substantially the risks and rewards
standing net investment in the lease.
incidental to the head lease are transferred to the end customer,
a corresponding lease receivable is recognised. In both cases,
the funding items for these long-term customer leases, which are
funded for terms that match those of the leases, are recognised
as lease liabilities.
We keep the world moving.KION GROUP AG | Annual Report 2014
144
Rental assets
Other property, plant and equipment
Rental assets are assets resulting from short-term rentals as well
Property, plant and equipment are carried at cost less straight-
as industrial trucks in relation to which significant risks and
line depreciation and impairment losses. The cost of internally
rewards remain with the KION Group despite the trucks having
generated machinery and equipment includes all costs directly
been sold (‘sale with risk’).
attributable to the production process and an appropriate
In the case of short-term rentals, LMH and STILL brand
portion of production overheads. This includes production-
companies rent industrial trucks to customers directly. Short-
related depreciation and proportionate costs for administration
term rental agreements usually have a term of one day to one
and social insurance / employee benefits.
year. The significant risks and rewards remain with the LMH and
The cost of property, plant and equipment is reduced by the
STILL brand companies. The industrial trucks are carried at cost
amount of any government grants received. Expenses for main-
and depreciated over the normal useful life of between five and
tenance and repairs are recognised in income to the extent that
seven years, depending on the product group.
they are not required to be capitalised. Borrowing costs are
In an indirect end customer finance arrangement, industrial
capitalised for certain items of property, plant and equipment
trucks are sold to finance partners who then enter into leases with
whose acquisition or production exceeds one year as soon as the
end customers. If LMH and STILL brand companies provide
definition of a qualifying asset is met. As was the case in the
material residual value guarantees or a customer default guar-
previous year, there were no qualifying assets in 2014.
antee (‘sale with risk’), these transactions, which are classified as
Depreciation of property, plant and equipment is recognised
sale agreements under civil law, are recognised in accordance
on a straight-line basis and reported under functional costs. The
with the provisions on lessors with operating leases in conjunc-
useful lives and depreciation methods are reviewed annually and
tion with the IFRS principles for revenue recognition. In this case,
adjusted to reflect changes in conditions.
the trucks are recognised as assets in the statement of financial
The useful lives below are applied in determining the carrying
position at their cost on the date of the sale and written down to
amounts of items of property, plant and equipment. > TABLE 043
their guaranteed residual value, or zero, on a straight-line basis
over the period until the residual value guarantee or the customer
default guarantee expires. If the KION Group provides a residual
value guarantee, an amount equivalent to the residual value
obligation is recognised under other financial liabilities.
Useful life of other property, plant and equipment
Buildings
Plant and machinery
Office furniture and equipment
TABLE 043
Years
10 – 50
3 – 15
2 – 15
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
145
Basis of presentation
KION Group companies also lease property, plant and equip-
If an impairment test for an item of property, plant and
ment for their own use using finance leases, which are recog-
equipment is performed at the level of a cash-generating unit to
nised as other property, plant and equipment. In this case, the
which goodwill is allocated and results in the recognition of an
lower of the fair value and present value of future lease payments
impairment loss, first the goodwill and, subsequently, the assets
is recognised at the inception of the lease. A corresponding
must be written down in proportion to their relative carrying
liability to the lessor is recognised under other financial liabilities
amounts. If the reason for an impairment loss recognised in prior
in the statement of financial position.
years no longer applies, impairment losses not exceeding the
Property, plant and equipment covered by finance leases is
amortised cost of the asset concerned are reversed. This does
depreciated over the shorter of its useful life or the term of the
not apply to goodwill.
lease, unless title to the leased assets passes to the lessee when
the lease expires, in which case the property, plant and equip-
ment is depreciated and the other financial liabilities are reversed
Equity-accounted investments
over the useful life of the leased assets.
The difference between total finance lease liabilities and
In accordance with the equity method, associates and joint
the fair value of the financed leased assets represents the finance
ventures are measured as the proportion of the interest in the
charge which is recognised in the income statement over the
equity of the investee. They are initially carried at cost. Sub-
term of the lease at a constant rate of interest on the outstanding
sequently, the carrying amount of the equity investment is
balance in each period. At the end of the lease term, the leased
adjusted in line with any changes to the KION Group’s interest in
assets are either returned or purchased, or the contract is
the net assets of the investee. The KION Group’s interest in the
extended.
profit or loss generated after acquisition is recognised in income.
If there are certain indications of impairment of the property,
Other changes in the equity of associates and joint ventures are
plant and equipment, the assets are tested for impairment by
recognised in other comprehensive income (loss) in the consoli-
comparing the residual carrying amount of the assets with their
dated financial statements in proportion to the Group’s interest in
recoverable amount, which is defined as the higher of value in use
the associate or joint venture.
and fair value less costs to sell. If the residual carrying amount is
If the Group’s interest in the losses made by an associate or
greater than the recoverable amount, an impairment loss is
joint venture exceeds the carrying amount of the proportionate
recognised for an asset. The impairment losses on property,
equity attributable to the Group, no additional losses are recog-
plant and equipment are reported under other expenses.
nised. Any goodwill arising from the acquisition of an associate or
The KION Group calculates the recoverable amount primarily
joint venture is included in the carrying amount of the investment
on the basis of value in use. In determining value in use, the
in the associate or joint venture.
expected future cash flows are discounted using a risk-adjusted
If there is evidence that an associate or joint venture may be
discount rate, taking into account the current and future level of
impaired, the carrying amount of the investment in question is
earnings and segment-specific, technological, economic and
tested for impairment. The carrying amount of the asset is
general trends.
compared with its recoverable amount. If the carrying amount is
greater than the recoverable amount, an impairment loss is
recognised for the equity investment.
We keep the world moving.KION GROUP AG | Annual Report 2014 146
Income taxes
Inventories
In the consolidated financial statements, current and deferred
Inventories are carried at the lower of cost and net realisable value.
taxes are recognised on the basis of the tax laws of the juris-
The acquisition costs of raw materials and merchandise are
dictions involved. Deferred taxes are recognised in other
calculated on the basis of an average.
comprehensive income (loss) if they relate to transactions also
The cost of finished goods and work in progress includes
recognised in other comprehensive income (loss).
direct costs and an appropriate portion of the material and pro-
Deferred tax assets and liabilities are recognised in accord-
duction overheads and production-related depreciation directly
ance with the liability method for all temporary differences
attributable to the production process. Administrative costs and
between the IFRS carrying amounts and the tax base, as well as
social insurance / employee benefits are included to the extent
for temporary consolidation measures.
that they are attributable to the production process. Borrowing
Deferred tax assets also include tax refund claims that arise
costs as defined by IAS 23 are not a component of cost as they
from the expected utilisation of existing tax loss carryforwards
are not qualifying assets as defined by IAS 23.4. The amount rec-
and interest carryforwards in subsequent years and whose utili-
ognised is an average value or a value determined in accordance
sation is reasonably certain according to current forecasts. On
with the FIFO method.
the basis of this estimate, deferred tax assets have been recog-
Net realisable value is the selling price that can be realised
nised on some loss carryforwards and interest carryforwards.
less the estimated costs of completion and the estimated costs
Deferred taxes are determined on the basis of the tax rates
necessary to make the sale.
that will apply or have been announced at the realisation date in
Write-downs are recognised for inventory risks resulting from
accordance with the current legal situation in each country con-
duration of storage, impaired recoverability, etc. Write-downs are
cerned. In accordance with the provisions in IAS 12, deferred tax
reversed up to a maximum of cost if the reasons for their recog-
assets and liabilities are not discounted.
nition no longer apply.
Deferred tax assets are offset against deferred tax liabilities
to the extent that they have the same maturity and relate to the
same taxation authority.
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
147
Basis of presentation
Trade receivables
Available-for-sale financial assets (AfS) are carried at fair
value. If they are equity investments for which no market price is
In the first period in which they are recognised, trade receivables
available, they are carried at cost. Unrealised gains and losses,
categorised as loans and receivables (LaR) are carried at fair
including deferred taxes, are reported in other comprehensive
value including directly attributable transaction costs. In sub-
income (loss) until they are realised. The equity investments in
sequent periods they are measured at amortised cost using the
subsidiaries that are reported in other non-current financial
effective interest method. Appropriate valuation allowances are
assets are carried at amortised cost less impairment losses, as
recognised for identifiable individual risks. Low-interest or non-in-
observable fair values are not available and reliable results cannot
terest-bearing receivables due in more than one year are carried
be obtained using other permitted measurement techniques. At
at their present value.
Cash and cash equivalents
present there is no intention to sell these financial instruments.
In the first period in which they are recognised, other financial
assets categorised as loans and receivables (LaR) are carried at
fair value including directly attributable transaction costs. In sub-
sequent periods they are measured at amortised cost using the
Cash and cash equivalents comprise cash, credit balances with
effective interest method. Appropriate valuation allowances are
banks and current financial assets that can be transformed into
recognised for identifiable individual risks. Low-interest or non-
cash at any time and are only subject to a minor level of volatility.
interest-bearing receivables due in more than one year are
Other financial assets
carried at their present value.
Carrying amounts of financial assets are tested for impair-
ment on every reporting date and whenever indications of impair-
ment arise. If there is an objective indication of impairment (such
Primary financial assets are initially recognised and derecognised
as a borrower being in significant financial difficulties), an impair-
in the financial statements on their settlement dates.
ment loss must be recognised directly in the income statement.
Under IAS 39 (‘Financial Instruments: Recognition and
If objective facts in favour of reversing impairment losses are
Measurement’), financial assets are classified as financial assets
present on the reporting date, reversals are carried out to an
held for trading and carried at fair value through profit and loss
appropriate extent. Reversals do not exceed the amortised cost
(FAHfT), financial assets carried at fair value through profit or loss
that would have arisen if the impairment loss had not been recog-
upon initial recognition (FAFVtPL), available-for-sale financial
nised. In the case of debt instruments classified as availa-
assets (AfS), financial assets classified as loans and receivables
ble-for-sale financial assets (AfS), reversals of impairment losses
(LaR) or held-to-maturity financial assets (HtM).
are recognised in the income statement.
As in the previous year, the KION Group did not designate
Held-to-maturity financial assets (HtM) are carried at amor-
any financial asset as carried at fair value through profit and loss
tised cost less impairment losses in accordance with the effective
(FAFVtPL) in the reporting year. The FAHfT category contains
interest method. As in the previous year, the KION Group did not
derivative financial instruments that do not form part of a formally
categorise any financial assets as HtM in the reporting year.
documented hedge.
We keep the world moving.KION GROUP AG | Annual Report 2014 148
Derivative financial instruments
If the criteria for hedge accounting are not satisfied, changes
in the fair value of derivative financial instruments are recognised
Derivative financial instruments are measured at their fair value
in the income statement.
and are reported as financial assets or financial liabilities as at the
In the case of hedges of net investments in foreign subsidiar-
reporting date. They are initially recognised and derecognised in
ies, the translation risks resulting from investments with a different
the financial statements on their settlement dates.
functional currency are hedged. Unrealised gains and losses on
Currently, derivative financial instruments in the KION Group
hedging instruments are reported in other comprehensive income
mainly comprise currency forwards that are used for hedging
(loss) until the company is sold. In the past financial year, as was
purposes to mitigate currency risk. In addition, the options on the
the case in the previous year, KION Group companies did not
shares in Linde Hydraulics are reported as derivative financial
enter into any hedges for net investments in foreign subsidiaries.
instruments (see note [36]). In the previous year, the KION Group
Further information on risk management and accounting for
used interest-rate derivatives to hedge interest-rate risk resulting
derivative financial instruments can be found in notes [36] and [37].
from loans with variable interest rates in various currencies.
Because these loans were repaid in the previous year, there were
no longer any material interest-rate derivatives in the KION Group
Retirement benefit obligation
as at 31 December 2013 or in 2014.
In accordance with IAS 39 (Financial Instruments: Recog-
The retirement benefit obligation is calculated in accordance with
nition and Measurement), all derivative financial instruments
the projected unit credit method. Future pension obligations are
must be measured at their fair value irrespective of an entity’s
measured on the basis of the pro rata vested benefit entitlements
purpose or intention in entering into the derivative contract.
as at the reporting date and discounted to their present value.
Changes in the fair value of derivative financial instruments in a
The calculations include assumptions about future changes in
formally documented hedge are reported in the income state-
certain parameters, such as expected salary and pension
ment (for fair value hedges) or in other comprehensive income
increases and biometric factors affecting the amount of future
(loss) (for cash flow hedges).
benefits. Pension provisions are reduced by the fair value of the
The KION Group currently only uses cash flow hedges, mainly
plan assets used to cover the Group’s benefit obligations. Plan
for currency risk. In the previous year, cash flow hedges were
assets are measured at fair value.
used for interest-rate risk until the variable-rate loans were repaid.
Remeasurements, including deferred taxes, are recognised
In the case of cash flow hedges, derivatives are employed to
in other comprehensive income (loss). It is not permitted to
hedge future cash flow risks from planned transactions and from
reclassify remeasurements recognised in other comprehensive
firm obligations not reported in the statement of financial position.
income (loss) to profit or loss in future periods. The cost of
The effective portion of changes in the fair value of derivatives is
additions to pension provisions is allocated to functional costs.
initially recognised in other comprehensive income (loss), and is
The interest cost on pension obligations and the interest income
subsequently reclassified to the income statement when the rev-
from plan assets are netted and reported in net financial
enue from the corresponding underlying transaction is realised.
income / expenses. Further details can be found in note [28].
The ineffective portion of the changes in fair value is recognised
immediately in the income statement.
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
149
Basis of presentation
Other provisions
Share-based payments
Other provisions are recognised when the Group has a legal or
IFRS 2 distinguishes between equity-settled and cash-settled
constructive obligation to a third party as the result of a past event
share-based payment transactions.
that is likely to lead to a future outflow of resources and that can
Equity-settled share-based payment
transactions are
be reliably estimated. Where there is a range of possible out-
recognised at their fair value at the date of grant. The fair value of
comes and each individual point within the range has an equal
the obligation is recognised as an expense under functional costs
probability of occurring, a provision is recognised in the amount
over the vesting period and offset against capital reserves.
of the mean of the individual points. Measurement is at full cost.
The portion of the fair value of cash-settled share-based pay-
Provisions for identifiable risks and contingent liabilities are
ments that is attributable to service provided up to the valuation
recognised in the amount that represents the best estimate of the
date is recognised as an expense under functional costs and is
cost required to settle the obligations. Recourse claims are not
also reported as a liability. The fair value is recalculated on each
taken into account. The settlement amount also includes cost
reporting date until the end of the performance period. Any
increases identifiable as at the reporting date. Provisions with a
change in the fair value of the obligation must be recognised (pro
maturity of more than twelve months are discounted using the
rata temporis) under expenses.
standard market interest rate. The discount rate is a before-tax
rate that reflects current market expectations for the time value of
money and the specific risks inherent in the liability. Accrued
Financial liabilities and other financial liabilities
interest is recognised in interest expenses.
Warranty provisions are recognised on the basis of past or
These liabilities are initially recognised at fair value at the time they
estimated future claim statistics. The corresponding expense is
are entered into. Directly attributable transaction costs are
recognised in cost of sales at the date on which the revenue is
deducted for all financial liabilities that are not subsequently
recognised. Individual provisions are recognised for claims that
designated as at fair value through profit or loss (FLaC). These
are known to the Group.
liabilities are then measured at amortised cost. Any differences
Provisions for expected losses from onerous contracts and
between historical cost and the settlement amount are recog-
other business obligations are measured on the basis of the work
nised in accordance with the effective interest method.
yet to be performed.
Other financial liabilities also include derivative financial
A restructuring provision is recognised when a KION Group
instruments. Derivative liabilities that do not form part of a formally
entity has prepared a detailed, formal restructuring plan and this
documented hedge must be categorised as FLHfT and carried at
plan has raised a valid expectation in those affected that the entity
fair value through profit or loss.
will carry out the restructuring by starting to implement that plan
or announcing its main features to those affected by it. The
measurement of a restructuring provision only includes the direct
expenditures arising from the restructuring and not associated
with the ongoing activities of the entity concerned.
We keep the world moving.KION GROUP AG | Annual Report 2014 150
Trade payables
Information on leases can be found in the sections on
leases / short-term rentals, leased assets, rental assets and other
Trade payables are categorised as FLaC and, in the first period in
property, plant and equipment in this note.
which they are recognised, are carried at fair value net of the
Defined benefit pension obligations are calculated on the
directly attributable transaction costs. In subsequent periods,
basis of actuarial parameters. As differences due to remeasure-
these liabilities are measured at amortised cost using the effec-
ments are taken to other comprehensive income (loss), any
tive interest method. Low-interest or non-interest-bearing liabili-
change in these parameters would not affect the net profit for the
ties due in more than one year are carried at their present value.
current period. For further details about sensitivity analysis in rela-
Assumptions and estimates
tion to the impact of all significant assumptions, please refer to
the information about the retirement benefit obligation in note [28].
Significant estimates are involved in calculating provisions for
tax. These estimates may change on the basis of new information
The preparation of the IFRS consolidated financial statements
and experience (see also note [14]).
requires the use of assumptions and estimates for certain line
The recognition and measurement of other provisions is
items that affect recognition and measurement in the statement
based on an estimate of the probability of the future outflow of
of financial position and the income statement. The actual
resources, supplemented by past experience and the circum-
amounts realised may differ from estimates. Assumptions and
stances known to the Group at the reporting date. Accordingly,
estimates are applied in particular:
the actual outflow of resources for a given event may be different
– in assessing the need for and the amount of impairment
losses on intangible assets, property, plant and equipment,
and inventories;
– in determining the useful life of non-current assets;
– in classifying leases;
– in measuring options;
– in the recognition and measurement of defined benefit pen-
– in assessing the recoverability of deferred tax assets.
sion obligations, provisions for tax, and other provisions; and
from the amount recognised in other provisions. Further details
can be found in note [31].
Deferred tax assets on tax loss carryforwards and interest
carryforwards are recognised on the basis of an estimate of the
future recoverability of the tax benefit, i.e. an assumption as to
whether sufficient taxable income or tax relief will be available
against which the carryforwards can be utilised. The actual
amount of taxable income in future periods, and hence the actual
utilisation of tax loss carryforwards and interest carryforwards,
may be different from the estimates made when the correspond-
ing deferred tax assets were recognised.
Goodwill is tested for impairment annually at the level of the
Where necessary, the KION Group’s accounting depart-
cash-generating units to which goodwill is allocated, applying the
ments receive assistance from external legal advisors and tax
budget for 2015 and the medium-term planning for 2016 to 2017
consultants when making the estimates required.
combined with the growth predicted in the market forecasts for
The carrying amounts of the affected line items can be found
the projections for 2018 to 2019 and assuming division-specific
in the relevant notes / the consolidated statement of financial
growth rates for the period thereafter. Any material changes to
position.
these and other factors might result in the recognition of impair-
The impact of a change to an estimate is recognised in profit
ment losses. Further information on goodwill can be found earlier
or loss prospectively when it becomes known and assumptions
in this note and in note [17].
are adjusted accordingly.
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
151
Notes to the consolidated income statement
[8] REVENUE
The revenue generated by the KION Group in the year under
review broken down by product category is as follows: > TABLE 044
Revenue by product category
in € million
New business
Service offering
– Aftersales
– Rental business
– Used trucks
– Other
Total revenue
Further information on revenue can be found in the segment
report in note [39].
TABLE 044
2013
2,519.6
1,975.0
1,174.2
443.1
226.4
131.3
2014
2,533.0
2,144.9
1,250.4
486.9
264.9
142.7
4,677.9
4,494.6
We keep the world moving.KION GROUP AG | Annual Report 2014
152
[9] OTHER INCOME
The breakdown of other income is as follows: > TABLE 045
Other income
in € million
Foreign currency exchange rate gains
Income from reversal of provisions
Profit from release of deferred lease profits
Net gains on the Weichai transactions
Gains on disposal of non-current assets
Rental income
Sundry income
Total other income
The foreign currency exchange rate gains included gains amount-
ing to €12.8 million (2013: €7.6 million) on derivative financial
instruments used to hedge operating currency risk. These gains
were offset by foreign currency exchange rate losses (other
expenses) of €4.3 million in 2014 (2013: €7.3 million). Overall, this
resulted in a net gain of €8.5 million on derivative financial instru-
ments used to hedge operating currency risk (2013: €0.3 million).
The sundry income that was reported predominantly included
earnings from commission collected of €19.0 million (2013:
€15.7 million), which are not reported under revenue.
TABLE 045
2013
24.2
10.6
8.4
8.1
7.3
2.0
61.0
121.7
2014
16.2
11.4
9.9
–
4.6
2.9
48.2
93.2
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
153
[10] OTHER EXPENSES
The breakdown of other expenses is as follows: > TABLE 046
Other expenses
in € million
Foreign currency exchange rate losses
Losses on disposal of non-current assets
Impairment of non-current assets
Sundry expenses
Total other expenses
The change in foreign currency exchange rate gains and losses is
attributable to exchange rate movements (see also note [9]).
TABLE 046
2013
22.3
1.8
1.2
21.4
46.7
2014
13.7
10.8
–
17.6
42.1
We keep the world moving.KION GROUP AG | Annual Report 2014
154
[11] SHARE OF PROFIT (LOSS) OF
EQUITY-ACCOUNTED INVESTMENTS
The amount for the previous year included income of
€7.0 million arising from the remeasurement of an existing equity-
accounted investment of 23.0 per cent held in Willenbrock
Fördertechnik Holding GmbH, Bremen, Germany, over which a
controlling influence can be exerted following the acquisition of
The share of profit (loss) of equity-accounted investments in the
further shares. Further details on equity-accounted investments
reporting year amounted to a loss of €24.8 million (2013: profit of
can be found in note [21].
€1.7 million). This loss was partly the result of a write-down that
had to be recognised on the stake held in Linde Hydraulics GmbH
& Co. KG, Aschaffenburg (referred to below as Linde Hydraulics),
which in turn was due to a downturn in business. The value in use
for Linde Hydraulics, which was calculated as part of an impair-
ment test using a discount rate of 7.4 per cent, amounted to
[12] FINANCIAL INCOME
€64.1 million. The total non-cash impairment loss recognised was
Financial income breaks down as follows: > TABLE 047
€13.5 million.
Financial income
in € million
Foreign currency exchange rate gains (financing)
Interest income from leases
Net interest income from defined benefit plans
Other interest and similar income
Total financial income
TABLE 047
2013
13.6
27.2
1.1
6.6
48.5
2014
4.3
29.6
1.1
49.5
84.4
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
155
The interest income from leases relates to the interest portion of
the shares in Linde Hydraulics resulted in total income of
lease payments in financial services transactions in which KION
€43.2 million in 2014, which was recognised under other interest
Group entities operate as lessors (finance leases).
and similar income (2013: expenses of €14.7 million under
Foreign currency exchange rate gains (financing) include
other interest expenses and similar charges). The impairment
gains of €0.7 million on hedging transactions (2013: €6.8 million).
loss relating to the stake held in Linde Hydraulics is included in
In the previous year, this line item had also included gains of
the share of profit (loss) of equity-accounted investments (see
€6.2 million from the repayment of a foreign-currency loan
also note [11]).
denominated in US dollars.
The line item ‘Net interest income from defined benefit plans’
relates to the net interest income on the net assets of four pension
plans in the United Kingdom in which plan assets exceed pension
obligations.
Measurement of the put option of Linde Material Handling
[13] FINANCIAL EXPENSES
GmbH, Aschaffenburg, and the two call options of Weichai Power
Financial expenses break down as follows: > TABLE 048
Co. Ltd., Weifang, China (referred to below as Weichai Power), on
Financial expense
in € million
Interest expense from loans
Interest expense from corporate bond
Interest cost of leases
Net interest expense from defined benefit plans
Amortisation of finance costs
Foreign currency exchange rate losses (financing)
Interest cost of non-current financial liabilities
Other interest expenses and similar charges
Total financial expense
TABLE 048
2013
59.1
65.2
43.0
18.7
30.2
9.6
1.2
41.5
268.4
2014
12.5
40.5
48.1
20.4
10.3
3.5
1.8
36.2
173.2
We keep the world moving.KION GROUP AG | Annual Report 2014
156
Interest expenses arising from loans and interest expenses from
corporate bond decreased by a substantial €46.6 million and
€24.6 million respectively in 2014 because the IPO resulted in a
vastly improved funding structure and funding conditions com-
[14] INCOME TAXES
pared with 2013. In the reporting year, interest expenses arising
The income tax expense of €80.0 million (2013: expense of
from loan liabilities related to a low-interest revolving credit facility
€15.9 million) consisted of €63.5 million in current tax expense
under the SFA, whereas in the previous year they largely related
(2013: €59.0 million) and €16.5 million in deferred tax expense
to a number of higher-interest loan liabilities under the SFA
(2013: deferred tax income of €43.1 million). The current tax
amounting to €32.4 million and losses of €26.7 million on inter-
expense included expenses of €6.9 million (2013: expenses of
est-rate swaps.
€9.1 million) relating to previous financial years.
The interest cost of leases relates to the interest portion of
At the reporting date there were income tax assets of
lease payments in financial services transactions in which the
€6.6 million receivable from tax authorities (2013: €15.4 million)
material risks and rewards are borne by KION Group entities as
and income tax liabilities of €31.3 million (2013: €27.7 million).
lessees (finance leases). Sale and finance leaseback operating
Deferred taxes are recognised for temporary differences
sub-leases (SALB-FL-OL) incurred interest expenses of €27.2 mil-
between the tax base and IFRS carrying amounts. Deferred taxes
lion (2013: €24.0 million). The income from corresponding cus-
are determined on the basis of the tax rates that will apply or have
tomer agreements is, according to IAS 17, a component of the
been announced at the realisation date in accordance with the
rental and lease payments received and is therefore reported
current legal situation in each country concerned. The current
within revenue rather than as interest income.
corporate income tax rate in Germany is 15.0 per cent plus the
Net interest expense from defined benefit plans relates to the
solidarity surcharge (5.5 per cent of corporate income tax). Taking
net interest cost of the net liability of pension plans applying the
into account the average trade tax rate of 14.63 per cent (2013:
discount rate for plans in which pension obligations exceed plan
14.14 per cent), the combined nominal tax rate for entities in
assets.
Germany was 30.5 per cent (2013: 30.0 per cent). The income tax
Early repayment in April 2014 of the fixed-rate tranche of the
rates for foreign companies used in the calculation of deferred
corporate bond issued in 2011, which was due to mature in 2018
taxes are between 10.0 per cent and 35.0 per cent (2013:
and had a volume of €325.0 million, and the floating-rate tranche
between 10.0 per cent and 37.6 per cent).
of the corporate bond issued in 2013, which was due to mature in
No deferred taxes have been recognised on temporary
2020 and had a volume of €200.0 million, led to non-recurring
differences of €88.8 million (2013: €88.5 million) between the
financial expenses. An amount of €8.4 million representing the
net assets reported in the consolidated financial statements for
proportion of the deferred finance costs relating to these bonds
the Group companies and the tax base for the shares in these
was recognised as an expense as amortisation of finance costs.
Group companies (outside basis differences) because the
A payment of €14.8 million representing early repayment charges
KION Group is in a position to manage the timing of the reversal
was recognised as other interest expenses and similar charges.
of temporary differences and there are no plans to dispose of
Foreign currency exchange rate losses (financing) included
investments in the foreseeable future.
losses on derivative financial instruments amounting to €0.4 mil-
lion (2013: €6.6 million).
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
157
Deferred tax assets are allocated to the following items in the
statement of financial position: > TABLE 049
Deferred tax assets
in € million
Intangible assets and property, plant and equipment
Financial assets
Current assets
Deferred charges and prepaid expenses
Provisions
Liabilities
Deferred income
Tax loss carryforwards and interest carryforwards
Offsetting
Total deferred tax assets
Deferred tax liabilities are allocated to the following items in the
statement of financial position: > TABLE 050
Deferred tax liabilities
in € million
Intangible assets and property, plant and equipment
Financial assets
Current assets
Deferred charges and prepaid expenses
Provisions
Liabilities
Deferred income
Offsetting
Total deferred tax liabilities
TABLE 049
2013
115.1
2.6
45.1
0.8
112.0
317.4
41.0
62.2
– 400.7
295.5
TABLE 050
2013
489.1
7.8
167.7
0.3
21.9
19.8
0.3
– 400.7
306.2
2014
136.0
0.1
40.5
0.5
178.1
295.1
46.2
62.1
– 400.6
357.9
2014
483.7
5.0
196.2
2.1
23.5
10.6
0.5
– 400.6
320.9
We keep the world moving.KION GROUP AG | Annual Report 2014
158
The deferred tax liabilities essentially relate to the purchase price
The KION Group’s corporation-tax loss carryforwards in
allocation in the acquisition of the KION Group, particularly for
Germany as at 31 December 2014 amounted to €108.2 million
intangible assets and property, plant and equipment.
(31 December 2013: €169.8 million), while trade-tax loss carryfor-
In 2014, deferred taxes of €62.5 million were recognised in
wards stood at €59.9 million (31 December 2013: €140.5 million).
other comprehensive income (loss), resulting in an increase in
There were also foreign tax loss carryforwards totalling €214.4 mil-
other comprehensive income (loss) (2013: €8.6 million, resulting in
lion (31 December 2013: €228.5 million).
a decrease in other comprehensive income (loss)). Of this amount,
The interest that can essentially be carried forward indefi-
deferred taxes of €60.6 million (2013: minus €1.1 million) arose
nitely in Germany as at 31 December 2014 amounted to
from the remeasurement of the defined benefit obligation. Fur-
€332.5 million (31 December 2013: €359.0 million).
thermore, deferred taxes of €1.9 million (2013: minus €7.5 million)
The table below shows the reconciliation of expected income
were recognised in connection with realised and unrealised
tax expense to effective income tax expense. The Group recon-
changes in the fair value of derivatives in cash flow hedges.
ciliation is an aggregation of the individual company-specific
Deferred taxes of €1.0 million were reclassified from accu-
reconciliations prepared in accordance with relevant local tax
mulated other comprehensive income (loss) to retained earnings
rates, taking into account consolidation effects recognised in
in connection with the deconsolidation of Linde Heavy Truck
income. The expected tax rate applied in the reconciliation is
Division Ltd.
30.5 per cent (2013: 30.0 per cent). > TABLE 051
No deferred tax assets have been recognised on tax loss
carryforwards of €162.0 million (2013: €231.8 million), on interest
carryforwards of €262.1 million (2013: €351.1 million) or on other
temporary differences of €1.2 million (2013: €0.7 million).
Deferred taxes are recognised on tax loss carryforwards and
interest carryforwards to the extent that sufficient future taxable
income is expected to be generated against which the losses can
be utilised. The total amount of unrecognised deferred tax assets
relating to loss carryforwards was therefore €34.2 million (2013:
€49.7 million), of which €32.3 million (2013: €41.0 million) concerns
tax losses that can be carried forward indefinitely.
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated income statement
159
Income taxes
in € million
Earnings before taxes
Anticipated income taxes
Deviations due to the trade tax base
Deviations from the anticipated tax rate
Losses for which deferred taxes have not been recognised
Change in tax rates and tax legislation
Interest carryforwards for which deferred taxes have not been recognised
Non-deductible expenses
Permanent differences
Tax-exempt income
Taxes relating to other periods
Deferred taxes relating to prior periods *
Other
TABLE 051
2013
154.3
2014
258.3
– 78.7
– 46.2
– 5.3
8.2
– 5.6
– 1.0
–
– 5.9
–
2.6
– 6.9
7.5
5.0
– 4.0
13.3
– 7.1
0.1
– 7.0
– 8.1
5.7
2.2
– 9.1
40.6
3.7
Effective income taxes (current and deferred taxes)
– 80.0
– 15.9
* In 2013 mainly due to the actual usability of tax loss carryforwards of KION Material Handling GmbH
[15] OTHER INCOME STATEMENT
DISCLOSURES
entitlements of €23.4 million (2013: €23.0 million) and unrecog-
nised past service cost of €2.6 million (2013: unrecognised past
service income of €1.7 million) arising from plan amendments and
curtailments.
Impairment losses and depreciation expenses on property,
The cost of materials rose by €99.0 million in the reporting year to
plant and equipment together with impairment losses and amor-
€2,220.7 million (2013: €2,121.7 million).
tisation expenses on intangible assets amounted to €367.2 mil-
Personnel expenses went up by €88.1 million to €1,231.9 mil-
lion in the reporting year (2013: €335.0 million). Inventories were
lion in 2014 (2013: €1,143.8 million). These personnel expenses
written down by €9.1 million (2013: €13.7 million).
included wages and salaries of €966.4 million (2013: €900.5 mil-
The breakdown of rental and lease payments expensed in
lion), social security contributions of €215.7 million (2013:
the period and arising in connection with operating leases in
€203.7 million) and expenses for pensions of €49.7 million (2013:
which KION Group entities are lessees is as follows: > TABLE 052
€39.5 million). The interest cost from the unwinding of the dis-
count on estimated pension obligations is not recognised under
personnel expenses and is instead reported under financial
expenses as a component of interest cost of the defined benefit
obligation. Pension expenses essentially comprised the pension
We keep the world moving.KION GROUP AG | Annual Report 2014
160
Lessee: Expenses recognised for operating lease payments
in € million
Procurement lease contracts
Sublease contracts
Total recognised expenses for lease payments
TABLE 052
2013
75.1
20.3
95.4
2014
81.0
16.2
97.1
The expenses in connection with sub-leases relate to leases and
Diluted earnings per share are calculated by adding the
rental agreements in which KION Group entities are both lessors
potential dilutive no-par-value shares that employees can obtain
and lessees. These expenses were offset by income of €37.6 mil-
for free under the employee share option programme to the
lion in 2014 (2013: €40.9 million).
weighted average number of shares outstanding during the
reporting period. The calculation of diluted earnings per share
was based on a weighted average of 98,693,221 no-par-value
shares issued. Diluted earnings per share for the reporting period
came to €1.79 (2013: €1.69). In the previous year, there had been
no equity instruments that diluted the earnings per share for the
number of shares issued.
[16] EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net
income (loss) accruing to the KION GROUP AG shareholders by
the weighted average number of shares outstanding during the
reporting period (2014: 98,692,041 no-par-value shares; 2013:
81,982,231 no-par-value shares). The net income accruing to the
shareholders of KION GROUP AG was €176.7 million (2013:
€138.8 million). Information about determining the net income
(loss) accruing to the KION GROUP AG shareholders can be
found in the consolidated income statement. Basic earnings per
share for the reporting period came to €1.79 (2013: €1.69). The
163,562 no-par-value treasury shares repurchased by KION
GROUP AG were not included in this figure as at 31 Decem-
ber 2014 (31 December 2013: 200,000).
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
161
Notes to the consolidated statement of financial position
[17] GOODWILL AND OTHER
INTANGIBLE ASSETS
Goodwill is allocated to the segments as follows: > TABLE 053
Goodwill broken down by segment
in € million
LMH
STILL
Other
Total goodwill
The change in the amount of goodwill in 2014 was the result of
currency effects. In the previous year, the change in goodwill
mainly resulted from the acquisition of Willenbrock and STILL
Arser, from which goodwill of €18.1 million and €5.0 million arose
respectively, and from countervailing currency effects.
TABLE 053
2013
925.1
556.5
13.1
2014
927.8
556.7
12.5
1,497.1
1,494.7
We keep the world moving.KION GROUP AG | Annual Report 2014
162
Intangible assets
in € million
Goodwill
Brand names
Technology &
development
Sundry
intangible assets
Balance as at 01/01/2013
1,473.2
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Impairment
Balance as at 31/12/2013
Gross carrying amount as at
31/12/2013
Accumulated amortisation
Balance as at 01/01/2014
Group changes
Currency translation adjustments
Additions
Disposals
Amortisation
Balance as at 31/12/2014
Gross carrying amount as at
31/12/2014
Accumulated amortisation
23.1
– 1.6
– 0.0
–
–
–
1,494.7
1,494.7
– 0.0
1,494.7
–
2.3
–
–
–
1,497.1
1,497.1
– 0.0
593.9
1.5
– 0.5
–
–
– 0.3
–
594.7
595.4
– 0.7
594.7
–
1.0
–
–
– 0.3
595.4
596.5
– 1.1
TABLE 054
Total
2,407.2
38.4
– 3.8
62.6
– 0.9
– 73.6
– 1.2
217.9
–
– 0.4
45.7
– 0.0
– 45.1
– 1.2
122.1
13.8
– 1.4
17.0
– 0.9
– 28.2
–
216.9
122.4
2,428.7
470.4
– 253.5
216.9
–
1.5
43.7
– 2.4
– 49.7
253.4
– 131.0
122.4
– 0.0
1.2
17.2
– 0.1
– 30.5
2,813.9
– 385.2
2,428.7
– 0.0
6.0
60.9
– 2.5
– 80.5
210.0
110.1
2,412.5
492.5
– 282.5
270.0
– 159.9
2,856.0
– 443.5
The Group intends to retain and further strengthen the Linde,
brand name is amortised over its useful life of five years. As at
STILL, OM STILL and KION brand names on a long-term basis.
31 December 2014, the brand names allocated to the Other seg-
Brand names worth €474.5 million are assigned to the LMH
ment (KION and Voltas) had a residual value of €5.5 million
segment (31 December 2013: €473.6 million) and brand names
(31 December 2013: €5.8 million), of which €5.1 million was attrib-
worth €115.3 million to the STILL segment (31 December 2013:
utable to brand names with an indefinite useful life (31 Decem-
€115.3 million). These assets are not amortised as they have an
ber 2013: €5.1 million). > TABLE 054
indefinite useful life. A value of €1.8 million was attributed to the
Voltas brand name and allocated to the Other segment. This
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
163
The total carrying amount for technology and development assets
Other intangible assets relate in particular to the intangible
as at 31 December 2014 was €210.0 million (31 December 2013:
assets identified in the course of purchase price allocation for the
€216.9 million). Development costs of €43.7 million were capital-
acquisition of the KION Group, such as the customer base.
ised in the reporting year (2013: €45.7 million). Total research and
development costs of €125.7 million (2013: €113.6 million) were
expensed. Of this amount, €49.7 million (2013: €45.1 million)
related to amortisation.
Impairment losses of €1.2 million were recognised on capital-
ised development costs in the previous year to reflect the lack of
[18] LEASED ASSETS
opportunities to use them in future as a result of the closure of the
The changes in leased assets in 2014 and 2013 were as follows:
heavy truck plant in Merthyr Tydfil (LMH segment).
> TABLE 055
Leased assets
in € million
Balance as at 1/1/
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Reclassification
Balance as at 31/12/
Gross carrying amount as at 31/12/
Accumulated depreciation
TABLE 055
2013
191.3
35.2
– 11.4
146.9
– 59.8
– 58.0
7.8
251.9
603.5
– 351.5
2014
251.9
–
– 1.1
172.8
– 73.9
– 69.5
– 1.3
279.0
615.4
– 336.5
Leased assets are attributable to the Financial Services segment
€48.5 million (31 December 2013: €50.7 million) that are largely
and relate to industrial trucks in the amount of €278.4 million
funded internally or by means of bank loans.
(2013: €251.6 million) that are leased to external customers under
Leased assets resulted in non-cancellable minimum lease
operating leases and to office furniture and equipment in the
payments from customers amounting to €285.6 million (31 Decem-
amount of €0.6 million (2013: €0.3 million).
ber 2013: €225.8 million).
Leased assets include assets leased over the long term with
a residual value of €230.5 million (31 December 2013: €201.2 mil-
lion) that are funded by means of sale and leaseback transactions
with leasing companies and leased assets with a residual value of
We keep the world moving.KION GROUP AG | Annual Report 2014
164
The following table shows the maturity structure of these
payments: > TABLE 056
Minimum lease payments
in € million
Cash receipts from minimum lease payments
due within one year
due in one to five years
due in more than five years
[19] RENTAL ASSETS
The changes in rental assets in 2014 and 2013 were as follows:
> TABLE 057
Rental assets
in € million
Balance as at 01/01/
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Reclassification
Balance as at 31/12/
Gross carrying amount as at 31/12/
Accumulated depreciation
TABLE 056
2013
225.8
89.6
134.7
1.5
2014
285.6
107.8
174.9
2.9
TABLE 057
2013
395.1
42.6
– 6.8
229.4
– 59.1
– 134.3
– 5.6
461.2
859.2
– 398.1
2014
461.2
– 12.2
2.1
264.9
– 81.4
– 147.4
– 0.1
487.1
899.1
– 412.0
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
165
Acquisitions amounting to €146.0 million (2013: €127.1 million)
and disposals amounting to €50.5 million (2013: €37.8 million)
were attributable to the LMH segment. Acquisitions amounting
to €119.1 million (2013: €102.4 million) and disposals amounting
to €30.9 million (2013: €21.4 million) were attributable to the
STILL segment.
The breakdown of rental assets by contract type is shown in
the following table: > TABLE 058
Rental assets broken down by contract types
TABLE 058
Operating leases as lessor
Sale with risk
Total
in € million
Industrial trucks
Truck equipment
Total rental assets
2014
410.9
9.5
420.3
2013
375.3
21.5
396.8
2014
66.7
0.1
66.7
2013
64.3
0.1
64.4
2014
477.5
9.5
487.1
2013
439.6
21.5
461.2
Rental assets comprise assets resulting from short-term
rentals (‘operating leases as lessor’) and assets in relation to
which significant risks and rewards remain with the KION Group
although they were sold (‘sale with risk’).
We keep the world moving.KION GROUP AG | Annual Report 2014
166
[20] OTHER PROPERTY, PLANT AND
EQUIPMENT
The changes in the carrying amounts of other property, plant and
equipment were as follows: > TABLE 059
Other property, plant and equipment
in € million
Balance as at 01/01/2013
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Reversal of impairment
Reclassification
Balance as at 31/12/2013
Gross carrying amount as at 31/12/2013
Accumulated depreciation
Balance as at 01/01/2014
Group changes
Currency translation adjustments
Additions
Disposals
Depreciation
Reclassification
Balance as at 31/12/2014
Gross carrying amount as at 31/12/2014
Accumulated depreciation
Plant, machinery,
and office
furniture and
equipment
Advances
paid and
assets under
construction
Land and
buildings
322.3
11.8
– 5.2
6.2
– 3.2
– 14.7
–
2.8
320.0
647.2
– 327.2
320.0
–
7.1
5.3
– 13.8
– 14.4
4.0
308.1
644.2
– 336.1
162.4
6.1
– 2.7
46.5
– 2.9
– 53.1
0.5
1.5
158.3
939.6
– 781.3
158.3
– 1.7
2.2
54.0
– 1.4
– 55.4
8.3
164.3
952.7
– 788.4
15.6
0.6
– 0.2
11.7
– 0.1
–
–
– 6.5
21.1
21.1
–
21.1
–
0.2
12.8
– 1.4
–
– 10.9
21.7
21.7
0.0
TABLE 059
Total
500.3
18.5
– 8.1
64.4
– 6.2
– 67.8
0.5
– 2.2
499.4
1,607.9
– 1,108.5
499.4
– 1.7
9.4
72.1
– 16.6
– 69.8
1.3
494.1
1,618.6
– 1,124.5
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
167
Land and buildings in the amount of €18.3 million (31 Decem-
ber 2013: €18.3 million) were largely pledged as collateral for
accrued retirement benefits under partial retirement agreements.
As in the previous year, the KION Group did not recognise
any significant impairment losses in accordance with IAS 36 on
[21] EQUITY-ACCOUNTED
INVESTMENTS
other property, plant and equipment in 2014.
The KION Group reported equity-accounted investments with a
Plant & machinery and office furniture & equipment include
total carrying amount of €114.6 million as at 31 December 2014
assets from procurement leases (finance leases) amounting to
(31 December 2013: €138.6 million). A significant portion of the
€13.1 million (31 December 2013: €13.3 million). Depreciation on
carrying amount of the associates resulted from the shares
these assets came to €5.3 million in 2014 (2013: €3.7 million). The
(30.0 per cent) in Linde Hydraulics. The associates and joint ven-
corresponding liabilities are reported as other financial liabilities.
tures can be seen in the list of shareholdings (see note [45]). Their
financial information is summarised below. > TABLES 060 – 061
Summarised financial information: associates
in € million
Total carrying amount
Profit (+) / loss (–) from continuing operations
Other comprehensive income
Total comprehensive income
Summarised financial information: joint ventures
in € million
Total carrying amount
Profit (+) / loss (–) from continuing operations
Other comprehensive income
Total comprehensive income
TABLE 060
2013
112.6
– 3.8
– 1.1
– 4.9
TABLE 061
2013
26.0
5.5
– 1.1
4.4
2014
88.5
– 29.8
– 2.6
– 32.3
2014
26.1
4.9
– 0.9
4.0
We keep the world moving.KION GROUP AG | Annual Report 2014
168
The amounts in the tables are based on the share held by the
Gross investments include minimum lease payments from
KION Group in the relevant associate or joint venture.
non-cancellable sub-leases amounting to €488.8 million (31
[22] LEASE RECEIVABLES
In the case of leases under which KION Group entities lease assets
directly to customers as part of the Group’s financial services
activities, the Group’s net investment in the lease is reported as a
lease receivable.
The amounts recognised as lease receivables are based on
the following data: > TABLE 062
Lease receivables
in € million
Gross investments
due within one year
due in one to five years
due in more than five years
Present value of outstanding minimum lease payments
due within one year
due in one to five years
due in more than five years
December 2013: €434.0 million).
Lease receivables include unguaranteed residual values of
€63.9 million (31 December 2013: €52.1 million).
TABLE 062
2013
537.5
194.8
326.9
15.8
479.6
170.8
293.6
15.2
2014
611.8
228.7
364.6
18.5
547.8
202.5
327.5
17.8
Unrealised financial income
64.0
57.9
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
169
[23] OTHER FINANCIAL ASSETS
The current derivative financial instruments essentially include
the put option on a portion of the shares in Linde Hydraulics
amounting to €34.7 million. As at 31 December 2013, this put
option had been recognised under non-current derivative finan-
Other financial assets of €202.5 million (31 December 2013:
cial instruments in the amount of €15.7 million.
€166.3 million) comprise the following: > TABLE 063
The sundry financial assets essentially include non-derivative
financial receivables amounting to €62.3 million (31 Decem-
Pension assets relate to asset surpluses from two defined benefit
ber 2013: €35.7 million) that fall within the scope of IFRS 7.
plans in the United Kingdom (31 December 2013: four) in which
plan assets exceed the present value of the defined benefit obliga-
tion (see note [28]).
Other financial assets
in € million
Pension assets
Investments in non-consolidated subsidiaries
Other investments
Loans receivable
Non-current securities
Derivative financial instruments
Other non-current financial assets
Derivative financial instruments
Financial receivables from affiliated companies and related companies
Financial receivables from third parties
Deferred charges and prepaid expenses
Sundry financial assets
Other current financial assets
TABLE 063
2013
22.4
7.8
4.1
0.8
0.8
15.7
51.7
3.6
7.6
4.0
25.7
73.8
114.7
2014
21.6
7.9
3.4
0.6
0.8
–
34.3
43.7
6.8
5.6
28.8
83.3
168.2
Total other financial assets
202.5
166.3
We keep the world moving.KION GROUP AG | Annual Report 2014
170
[24] INVENTORIES
The reported inventories break down as follows: > TABLE 064
Inventories
in € million
Materials and supplies
Work in progress
Finished goods and merchandise
Advances paid
Total inventories
The slight year-on-year rise in inventories was largely attributable
to the increase in materials and supplies (up by 12.8 per cent) and
work in progress (up by 7.1 per cent). In 2014, impairment losses
of €9.1 million were recognised on inventories (2013: €13.7 mil-
lion). Reversals of impairment losses had to be recognised in the
amount of €4.1 million (2013: €7.0 million) because the reasons for
the impairment losses no longer existed.
[25] TRADE RECEIVABLES
The trade receivables break down as follows: > TABLE 065
TABLE 064
2013
108.3
66.7
331.2
5.5
511.8
2014
122.2
71.5
330.8
4.7
529.2
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
171
Trade receivables
in € million
Receivables from third parties
thereof receivables from third parties before valuation allowances
thereof valuation allowances for overdue receivables > 90 days ≤ 180 days
thereof valuation allowances for overdue receivables > 180 days
thereof other valuation allowances for receivables
Trade receivables from affiliated companies
Trade receivables from associated companies and joint ventures
Total trade receivables
TABLE 065
2013
540.1
582.6
– 6.2
– 25.8
– 10.4
5.8
12.8
558.7
2014
582.6
622.8
– 6.9
– 22.3
– 11.1
4.7
10.9
598.2
Valuation allowances of €40.2 million (31 December 2013:
€42.4 million) were recognised for trade receivables.
[26] CASH AND CASH EQUIVALENTS
The change in cash and cash equivalents is shown in the consol-
idated statement of cash flows. For more detailed information,
please also refer to note [35]. > TABLE 066
Cash and cash equivalents
in € million
Cash held by banks, on hand and cheque
Pledged cash
Total cash and cash equivalents
TABLE 066
2013
219.1
0.3
219.3
2014
98.7
0.2
98.9
We keep the world moving.KION GROUP AG | Annual Report 2014
172
[27] EQUITY
€9.89 million by way of an issue of up to 9,890,000 new no-par-
value bearer shares (2014 Authorised Capital).
To safeguard the Company’s funding options, the Executive
Board is also authorised until 18 May 2019 to issue warrant-linked
Subscribed capital and capital reserves
bonds, convertible bonds or profit-sharing rights with a total par
value of up to €800 million that contain pre-emptive rights / obliga-
As at 31 December 2014, the Company’s share capital amounted
tions for up to 9,890,000 no-par-value shares. To this end, a
to €98.9 million, which was unchanged on 31 December 2013,
conditional increase was decided upon in order to increase the
and was fully paid up. It was divided into 98.9 million no-par-
Company’s share capital by up to €9.89 million by way of an
value shares.
issue of up to 9,890,000 new no-par-value bearer shares (2014
As authorised by the Annual General Meeting on 13 June
Conditional Capital).
2013, 200,000 treasury shares had been repurchased via the
The total amount attributable to shares that was spent in
stock exchange in 2013 for a planned share-based remunera-
connection with this authorised/conditional capital may not
tion programme.
exceed 10 per cent of the share capital. In both cases, the
In 2014, the Executive Board of KION GROUP AG decided to
pre-emptive right of shareholders can be excluded in certain
introduce an employee share option programme to enable staff
circumstances. The corresponding amendments to the Articles
members, initially those working for the participating German
of Incorporation were entered in the commercial register on
companies in the KION Group, to derive greater benefit from the
16 June 2014.
success of the Company.
Between 10 September 2014 and 30 September 2014, a
further 51,000 treasury shares were repurchased via the stock
Retained earnings
exchange at an average price of €30.29 in order to provide the
shares for employees’ own investments and the free shares
The development of retained earnings is shown in the consolidated
under the programme. The total cost was €1.5 million. Due to the
statement of changes in equity in > TABLE 038. The retained earn-
issue of 87,438 no-par-value shares under the employee share
ings comprise the net income (loss) for the financial year and past
option programme, KION GROUP AG held 163,562 treasury
contributions to earnings by the consolidated entities, provided
shares at the reporting date (31 December 2013: 200,000). These
they have not been distributed.
are not dividend-bearing and do not confer any voting rights.
The distribution of a dividend of €0.35 per share to the share-
Further details on the employee share option programme can be
holders of KION GROUP AG resulted in an outflow of funds of
found in note [42].
€34.5 million in 2014.
The total number of shares outstanding as at 31 December
2014 was 98,736,438 no-par-value shares (31 December 2013:
98,700,000 no-par-value shares).
Appropriation of profit
As at 31 December 2014, KION Group employees held
options on a total of 29,116 no-par-value shares. The share
The Executive Board and Supervisory Board of KION GROUP AG
options granted under the employee share option programme
will propose a dividend of €0.55 per share to the Annual General
are not dividend-bearing and do not confer any voting rights.
Meeting on 12 May 2015. As there were 98,736,438 dividend-
The Annual General Meeting on 19 May 2014 voted to cre-
bearing shares as at 31 December 2014, this equates to a total
ate authorised capital that will enable the KION Group to meet
dividend payout of €54.3 million. Roughly 31 per cent of the net
its funding needs quickly and flexibly. Subject to the consent of
income accruing to the KION Group shareholders will therefore
the Supervisory Board, the Executive Board is authorised until
be distributed in dividends.
18 May 2019 to increase the Company’s share capital by up to
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
173
Accumulated other comprehensive
income (loss)
butions paid by employers into government-run schemes came
to €52.4 million (2013: €52.8 million). The defined contribution
plan expense is reported within the functional costs.
Accumulated other comprehensive income (loss) includes the
currency translation differences arising from the translation of the
financial statements of foreign subsidiaries, the effects of the fair
Defined benefit plans
value measurement of derivative financial instruments, the share
of profit (loss) of equity-accounted investments, and the gains and
In the case of defined benefit plans, the beneficiaries are granted
losses in connection with defined benefit pension obligations.
a specific benefit by the Group or an external pension fund. Due
Non-controlling interests
to future salary increases, the benefit entitlement at the retirement
age of the beneficiary is likely to be higher than the amount
granted as at the reporting date. Pensions are often adjusted
after an employee reaches retirement age. The amount of the
Non-controlling interests in companies in the KION Group
Group’s obligation, which is defined as the actuarial present value
amounted to €5.3 million (31 December 2013: €5.0 million).
of the obligation to provide the level of benefits currently earned
[28] RETIREMENT BENEFIT
OBLIGATION
by each beneficiary, is expressed as the present value of the
defined benefit obligation, which includes adjustments for future
salary and pension increases.
The KION Group currently grants pensions to almost all
employees in Germany and a number of foreign employees.
These pensions consist of fixed benefit entitlements and are
therefore reported as defined benefit plans in accordance with
The retirement benefit obligation is recognised for obligations
IFRS. As at 31 December 2014, the KION Group had set up
to provide current and future post-employment benefits. Post-
defined benefit plans in 13 countries. For all of the significant
employment benefit plans are classified as either defined benefit
defined benefit plans within the Group, the benefits granted to
plans or defined contribution plans, depending on the substance
employees are determined on the basis of their individual income,
of the plan as derived from its principal terms and conditions.
i.e. either directly or by way of intermediate benefit arrange-
Defined contribution plans
ments. The largest of the KION Group’s defined benefit plans –
accounting for 91.2 per cent of the global defined benefit obli-
gation (31 December 2013: 91.3 per cent) – are in Germany and
the United Kingdom.
In the case of defined contribution pension plans, the Group pays
contributions to government or private pension insurance provid-
Germany
ers based on statutory or contractual provisions, or on a voluntary
In Germany, the pension benefits granted under the 2001 pension
basis. The Group does not enter into any obligations above and
benefit conditions and 2002 pension benefit conditions depend
beyond the payment of contributions to an external pension fund.
on employees’ length of service and gross annual remuneration
The amount of future pension benefits is based solely on the
(pension component entitlement). The pension component is cal-
amount of the contributions paid by the employer (and in some
culated by multiplying a certain percentage by an age-dependent
cases the beneficiaries themselves) to the external pension fund,
annuitisation factor. The contribution rate is 3.4 per cent (2001
including income from the investment of these contributions. The
pension benefit conditions) or 2.0 per cent (2002 pension benefit
total expense arising from defined contribution plans amounted
conditions) of the gross remuneration that an employee earns in the
to €58.3 million in 2014 (2013: €57.6 million). Of this total, contri-
computation period. Employees receive the pension entitlement
We keep the world moving.KION GROUP AG | Annual Report 2014 174
that they have earned in the form of a monthly retirement pension
the Company’s insolvency, the company pension scheme is to a
or invalidity benefit or, in the event of their death, the entitlement
large extent protected by law by the Pension Security Association.
is paid to their surviving dependants in the form of a widow’s /
widower’s pension or orphans’ pension. Members of the Executive
United Kingdom
Board and other executives are predominantly covered by indi-
Previously in the United Kingdom, defined benefit pension obliga-
vidual pension plans. For details of the pension entitlements of
tions predominantly related to four plans. Following the deconsol-
KION GROUP AG Executive Board members, please refer to the
idation of Linde Heavy Truck Division Ltd. in December 2014, two
information in note [43]. The amount of the benefits paid to
of these pension plans (Blackwood Schemes) were eliminated
executives depends on the type of entitlement. Under the ‘old’
from the basis of consolidation. The defined benefits include not
individual pension plans, executives were entitled to a certain
only a life-long retirement pension but also surviving dependants’
percentage of income as their pension benefit. By contrast, the
benefits. The amount of the pension depends on employees’
employer-funded entitlement under the ‘new’ individual pension
length of service and final salary. The two plans still remaining on
plans consists of two components: a fixed basic pension and a
the reporting date were closed to new employees more than ten
variable top-up pension through which annual components are
years ago. Production at the heavy truck plant in Merthyr Tydfil
earned within a defined contribution system. Both components
(Wales, United Kingdom) was shut down in 2013 as planned,
depend on the seniority of the executive.
resulting in gains on plan curtailments from the Blackwood
In addition, employees in Germany are able to pay part of
Schemes in the previous year.
their salary into a company pension plan, for which KION pro-
Each of the two plans is monitored by its own board of trus-
vides a defined minimum interest rate to enable employees to
tees, which oversees the running of the plan as well as its funded
build up their personal pension provision. The pension benefits
status and the investment strategy. The members of the boards
consist of retirement, invalidity and surviving dependants’ ben-
of trustees comprise people appointed by the companies involved
efits. Each contribution made is converted into a capital compo-
and selected plan beneficiaries.
nent on the basis of a guaranteed minimum interest rate of
Under UK law, the board of trustees is obliged to have a valu-
3.0 per cent and depending on the age of the employee. The
ation of the plan carried out at least every three years. In connection
capital components acquired each calendar year are added up
with the 2012 valuation of the pension plans for the employees of
to give the pension capital. When an insured event occurs, the
the KION Group’s UK companies, the Company and the trustees
pension capital is converted into an ongoing life-long pension or
of the pension funds agreed on a calculation method in May 2014,
a one-off capital payment.
according to which the deficit for the two remaining pension plans
In Germany, the KION Group also helps employees to build
amounted to €8.6 million as at 1 July 2013. On this basis, the
up their own pension provision with an additional matching con-
KION Group agreed with the trustees that it would pay approxi-
tribution for those employees who pay part of their salary into the
mately the equivalent of €4.5 million in 2015 and around €2.3 mil-
KION pension plan. The additional matching contribution received
lion in 2016 in order to reduce the deficit. However, these pay-
by executives is 50.0 per cent of the amount they defer in a calendar
ments are subject to the condition that the annual review of the
year, although the absolute amount of this contribution is limited
pension plans’ funding position continues to reveal a deficit. If a
to a certain percentage of income (ranging from 2.5 per cent to a
payment would result in the pension plans being overfunded, the
maximum of 5.0 per cent). All other employees who participate in
KION Group would be exempt from its payment obligation in that
the company pension scheme receive up to 0.4 per cent of their
year. Between January and May 2014, the KION Group made
gross remuneration.
one-off payments equivalent to €1.4 million. Under the new
Some of the KION Group’s pension obligations in Germany
agreement, no further payments were due in 2014.
are financed by way of contractual trust arrangements (CTAs),
In addition, KION Material Handling GmbH has given default
which qualify as plan assets within the meaning of IAS 19. There
guarantees to the trustees of the Blackwood Schemes under
are no statutory minimum funding requirements. In the event of
which, if the employer defaults, KION Material Handling GmbH
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
175
will assume all obligations of the employer up to the amount of the
account the change in plan assets and pension obligations. They
buy-out deficit, provided certain conditions are met.
also take into account the statutory minimum coverage require-
These guarantees replace the letters of support issued in
ments and the amounts deductible under local tax rules.
2013, which themselves had replaced the guarantees given to the
Blackwood Schemes by KION Material Handling GmbH (formerly
KION GROUP GmbH) after KION GROUP AG’s IPO, as set forth
Measurement assumptions
in the original guarantee agreements. Where these letters of sup-
port had been given in respect of UK pension plans other than the
In accordance with IAS 19 (‘Employee Benefits’), pension provi-
Blackwood Schemes, these letters of support were amended by
sions are recognised to cover obligations arising from the current
mutual agreement so that the trustees were able to measure the
and future pension entitlements of active and (after the vesting
deficits of the pension plans at any time in future without losing
period has expired) former employees of the KION Group and
the entitlements in the relevant letter of support.
their surviving dependants. The discount rate used to calculate
The trustees of all four plans were also granted collateral in
the defined benefit obligation at each reporting date is deter-
rem in the form of charges on the real estate of Group compa-
mined on the basis of current capital market data and long-term
nies in the UK and flexible collateral in respect of the rental fleets
assumptions about future salary and pension increases in
of UK dealers within a maximum overall limit of approximately
accordance with the best estimate principle. These assumptions
€23.2 million. The term of this collateral is limited to five years
vary depending on the economic conditions affecting the cur-
(1 July 2018), and the overall limit will not be reduced by pay-
rency in which benefit obligations are denominated and in which
ments made by the KION Group. The likelihood of the guarantee
fund assets are invested, as well as capital market expectations.
being used is deemed low in view of the position of the individ-
Benefit obligations are calculated on the basis of current
ual companies with regard to their current and future financial
biometric probabilities as determined in accordance with actu-
and earnings situations.
Other countries
arial principles. The calculations also include assumptions about
future employee turnover based on employee age and years of
service and about the probability of retirement. The defined
Furthermore, significant asset volumes are invested in external
benefit obligation is calculated on the basis of the significant
pension funds with restricted access in Switzerland and the
weighted- average assumptions as at the reporting date shown
Netherlands. Decisions on additions to plan assets take into
in > TABLE 067.
Assumptions underlying provisions for pensions and other postemployment benefits
TABLE 067
Germany
UK
Other
Discount rate
Salary increase rate
Pension increase rate
2014
2.20%
2.75%
1.75%
2013
3.60%
2.75%
1.75%
2014
3.55%
4.25%
3.18%
2013
4.40%
4.16%
3.53%
2014
1.79%
2.49%
0.42%
2013
2.95%
2.44%
0.48%
We keep the world moving.KION GROUP AG | Annual Report 2014
176
The assumed discount rate is determined on the basis of the yield
The significant weighted-average assumptions shown in
as at the reporting date on AA-rated, investment-grade, fixed-
> TABLE 068 were applied to the calculation of the net interest
interest corporate bonds with maturities that match the expected
cost and the cost of benefits earned in the current year (current
maturities of the pension obligations. Pension obligations in for-
service cost).
eign companies are calculated on a comparable basis taking into
Differences between the forecast and actual change in the
account any country-specific requirements.
defined benefit obligation and changes in related assets (known
Future increases in salaries are estimated on an annual basis
as remeasurements) are recognised immediately in other com-
taking into account factors such as inflation and the overall eco-
prehensive income in accordance with IAS 19. This serves to
nomic situation.
ensure that the pension liability in the statement of financial
The biometric mortality rates used in the calculation are
position is the present value of the defined benefit obligation.
based on published country-specific statistics and empirical
In the case of externally financed pension plans, this present
values. Since 31 December 2009, the modified Heubeck 2005
value of the defined benefit obligation is reduced by the fair value
G mortality tables have been used in Germany as the biomet-
of the assets of the external pension fund (plan assets). If the plan
ric basis; the modified tables include a somewhat higher
assets exceed the present value of the defined benefit obligation
life expectancy for males than the unmodified tables. The
(net assets), a corresponding asset is recognised in accordance
S1NA CMI 2013 (standard mortality tables for self-administered
with IAS 19. IAS 19.64 in conjunction with the supplementary
pension schemes (SAPS) based on normal health) with a long-
explanatory information in IFRIC 14 states that the recognition
term trend of 1.25 per cent p.a. is applied to the two defined
of an asset for an excess of plan assets is only permitted if
benefit plans in the United Kingdom that were still remaining as
the company concerned, in its function as the employer, gains
at the reporting date.
economic benefits in the form of reductions in future contribu-
The actuarial assumptions not listed in > TABLE 067, such as
tions to the plan or in the form of refunds from the plan. If the
employee turnover, invalidity, etc., are determined in accordance
present value of the defined benefit obligation is not covered by
with recognised forecasts in each country, taking into account
the plan assets, the net obligation is reported under the retirement
the circumstances and forecasts in the companies concerned.
benefit obligation.
Assumptions underlying for pensions expenses
Germany
UK
Other
Discount rate
Salary increase rate
Pension increase rate
2014
3.60%
2.75%
1.75%
2013
3.50%
2.75%
1.75%
2014
4.40%
4.16%
3.53%
2013
4.35%
4.17%
2.94%
2014
2.95%
2.44%
0.48%
TABLE 068
2013
2.57%
2.36%
0.26%
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
177
In two defined benefit plans in the United Kingdom, plan assets
ties in the same amount relating to the direct pension entitlement
exceed the present value of the defined benefit obligation. Stipu-
scheme are included in > TABLES 069 – 075. As a result, the present
lations limiting the asset to be recognised in the statement of
value of the defined benefit obligation and the fair value of the
financial position do not apply.
plan assets shown in the tables as at 1 January 2013 and 31 Decem-
ber 2013 increased by €19.5 million and €23.1 million respectively.
The change in the present value of the defined benefit obliga-
Statement of financial position
tion (DBO) is shown in > TABLE 069.
Plan assets from employee contributions in Germany, which were
ble to subsidiaries in Switzerland (2014: €48.7 million; 2013:
reported separately in previous years, amounted to €28.2 million
€40.0 million) and the Netherlands (2014: €38.4 million; 2013:
(31 December 2013: €23.1 million) and the corresponding liabili-
€27.7 million).
The DBO in the other countries was predominantly attributa-
Changes in defined benefit obligation
TABLE 069
Germany
UK
Other
Total
in € million
2014
2013
2014
2013
2014
2013
2014
2013
Present value of defined benefit obligation
as at 01/01/
Group changes
Exchange differences
Current service cost
588.1
564.9
–
–
0.0
–
19.1
18.3
422.1
– 53.2
30.5
1.1
419.5
95.7
98.4
1,106.0
1,082.7
–
– 8.5
1.2
–
1.0
3.1
0.0
– 0.8
3.4
– 53.2
31.5
23.4
0.1
– 9.2
23.0
Past service cost (+) and income (–) from
plan amendments
Past service cost (+) and income (–) from
curtailments
Interest expense on defined benefit obligation
Employee contributions
3.4
–
21.3
3.2
–
–
19.6
2.5
Pension benefits directly paid by company
– 12.9
– 12.1
Pension benefits paid by funds
Liability transfer out to third parties
Remeasurements
Present value of defined benefit obligation
as at 31/12/
thereof unfunded
thereof funded
– 0.2
– 0.4
188.0
809.6
334.4
475.2
– 0.4
– 4.7
588.1
237.9
350.3
0.1
0.3
– 0.9
– 1.3
2.6
– 1.0
–
18.7
–
–
– 0.7
17.1
0.0
–
–
–
38.0
11.0
–
– 18.9
– 17.7
–
2.8
0.9
– 1.6
– 2.2
– 0.0
22.0
–
2.5
0.9
– 1.0
– 1.4
–
–
42.7
4.1
– 14.4
– 21.4
– 0.5
– 5.0
247.9
– 0.7
39.2
3.4
– 13.1
– 19.1
– 0.4
1.3
438.4
422.1
120.8
95.7
1,368.8
1,106.0
–
–
438.4
422.1
33.6
87.2
28.0
368.1
67.8
1,000.7
265.9
840.2
We keep the world moving.KION GROUP AG | Annual Report 2014
178
The components of the remeasurements are listed in > TABLE 073.
ered by corresponding reimbursements from plan assets.
The change in the fair value of plan assets is shown in
According to local valuation rules, there continue to be gaps in
> TABLE 070.
the coverage of two defined benefit pension plans in the United
Employees in Germany paid a total of €3.2 million (2013:
Kingdom, as a result of which the expected employer contribu-
€2.5 million) into the KION pension plan in 2014.
tions in 2015 include one-off payments of €4.5 million (2014:
In 2014, employer contributions in the United Kingdom,
€6.9 million for all four plans) in line with the agreements reached
which amounted to €2.4 million, included one-off payments of
with the trustees.
€1.4 million into pension funds on the basis of contractual agree-
The reconciliation of funded status and net defined benefit
ments. In Germany, one-off payments of €0.6 million (2013:
obligation to the amounts reported in the consolidated statement
€2.4 million) were also made to a German CTA for the other mem-
of financial position as at 31 December is shown in > TABLE 071.
bers of the KION GROUP AG Executive Board.
As a result, the funding ratio (ratio of plan assets to the pres-
The payments expected for the following year amount to
ent value of the defined benefit obligation) in the KION Group was
€22.6 million (2014: €23.7 million), which includes expected
44.0 per cent (2013: 51.4 per cent).
employer contributions of €7.3 million to plan assets (2014:
The change in the retirement benefit obligation reported in
€9.2 million) and expected direct payments of pension benefits
the statement of financial position is shown in > TABLE 072.
amounting to €15.3 million (2014: €14.6 million) that are not cov-
Changes in plan assets
TABLE 070
in € million
Fair value of plan assets as at 01/01/
Group changes
Exchange differences
Interest income on plan assets
Employee contributions
Employer contributions
Pension benefits paid by funds
Liability transfer out to third parties
Remeasurements
Fair value of plan assets as at 31/12/
Germany
UK
Other
Total
2014
65.0
–
–
2.1
3.2
1.0
– 0.2
– 0.1
2.6
73.6
2013
59.5
–
–
2.1
2.5
2.4
–
–
– 1.5
65.0
2014
441.6
– 56.5
31.8
19.6
–
2.4
2013
439.5
–
– 8.9
18.1
0.0
7.3
2014
61.7
–
0.8
1.7
0.9
2.2
2013
58.9
–
– 0.6
1.4
0.9
1.9
2014
568.3
– 56.5
32.6
23.4
4.1
5.6
2013
557.9
–
– 9.5
21.6
3.4
11.6
– 18.9
– 17.7
– 2.2
– 1.4
– 21.4
– 19.1
–
35.5
–
3.3
–
8.8
–
0.6
– 0.1
46.9
–
2.4
455.5
441.6
73.8
61.7
603.0
568.3
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
179
Statement of cash flows
During the reporting year, pension benefits of €35.8 million
(2013: €32.2 million) were paid in connection with the main
In the case of obligations not covered by external assets, pay-
pension entitlements in the KION Group, of which €14.4 million
ments to beneficiaries are made directly by the Company and
(2013: €13.1 million) was paid directly by the Company and
therefore have an impact on cash flow from operating activities. If
€21.4 million (2013: €19.1 million) was paid from plan assets. Cash
the benefit obligations are backed by external assets, the pay-
contributions to plan assets in 2014 amounted to €5.6 million
ments are made from existing plan assets and have no effect on
(2013: €11.6 million). Furthermore, pension benefit payments
the Company’s cash flow. Instead, any contributions made to the
totalling €0.4 million (2013: €0.4 million) were transferred to
external pension fund by the Company result in a cash outflow for
external pension funds.
operating activities.
Funded status and net defined benefit obligation
TABLE 071
Germany
UK
Other
Total
in € million
2014
2013
2014
2013
2014
2013
2014
2013
Present value of the partially or fully funded
defined benefit obligation
Fair value of plan assets
Surplus (+) / deficit (–)
– 475.2
– 350.3
– 438.4
– 422.1
– 87.2
– 67.8 – 1,000.7
– 840.2
73.6
65.0
455.5
441.6
73.8
– 401.6
– 285.3
17.2
19.5
– 13.3
61.7
– 6.1
603.0
568.3
– 397.8
– 271.8
Present value of the unfunded defined
benefit obligation
– 334.4
– 237.9
Net liability (–) / net asset (+) as at 31/12/
– 736.0
– 523.1
Reported as ‘retirement benefit obligation’
– 736.0
– 523.1
–
17.2
– 4.5
–
19.5
– 2.9
– 33.6
– 47.0
– 47.0
– 28.0
– 368.1
– 265.9
– 34.1
– 765.8
– 537.7
– 34.1
– 787.5
– 560.1
Reported as ‘Other non-current
financial assets’
–
–
21.6
22.4
–
0.0
21.6
22.4
We keep the world moving.KION GROUP AG | Annual Report 2014
180
Changes in retirement benefit obligation
TABLE 072
in € million
Balance as at 01/01/
Group changes
Exchange differences
Total service cost
Net interest expense
Pension benefits directly paid by
company
Employer contributions to plan assets
Liability transfer out to third parties
Remeasurements
Balance as at 31/12/
Germany
UK
Other
Total
2014
523.1
–
–
22.5
19.2
2013
505.4
0.0
–
18.3
17.5
– 12.9
– 12.1
– 1.0
– 0.3
185.4
736.0
– 2.4
– 0.4
– 3.2
523.1
2014
2013
2.9
–
0.3
–
0.1
–
2.7
–
– 0.1
–
0.1
–
– 0.2
– 0.2
–
1.4
4.5
–
0.4
2.9
2014
34.1
–
0.2
2.2
1.1
– 1.6
– 2.2
– 0.0
13.2
47.0
2013
39.5
0.0
– 0.2
2.1
1.1
– 1.0
– 1.9
–
– 5.6
34.1
2014
560.1
–
0.4
24.7
20.4
2013
547.6
0.1
– 0.2
20.4
18.7
– 14.4
– 13.1
– 3.4
– 0.4
200.0
787.5
– 4.5
– 0.4
– 8.4
560.1
Income statement
present value of the defined benefit obligation) by the discount rate
at the start of the year, is also recognised in the income statement.
In accordance with IAS 19, actuarial computations are performed
The breakdown of the net cost of the defined benefit obligation
for benefit obligations in order to determine the amount to be
(expenses less income) recognised in the income statement for
expensed in each period in accordance with fixed rules. The
2014 is shown in > TABLE 073.
expenses recognised in the income statement for pensions and
The KION Group’s net financial income/expenses includes a
similar obligations consist of a number of components that must
net interest cost of €19.3 million (2013: €17.6 million). All other
be calculated and disclosed separately.
components of pension expenses are recognised under func-
The service cost is the new pension entitlement arising in
tional costs.
the financial year and is recognised in the income statement. It is
The actual total return on plan assets in 2014 was €70.3 mil-
calculated as the present value of that proportion of the expected
lion (2013: €24.0 million).
defined benefit obligation when the pension is paid attributable to
the year under review on the basis of the maximum length of
service achievable by each employee.
Other comprehensive income (loss)
Past service cost arises if there is a change to the pension
entitlement and it is recognised immediately in full.
The breakdown of the remeasurement of the defined benefit obli-
The net interest cost/income, which is calculated by multiplying
gation recognised in the statement of comprehensive income in
the net liability (present value of the defined benefit obligation
2014 is as follows: > TABLE 074
minus plan assets) or the net assets (if the plan assets exceed the
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
181
Cost of defined benefit obligation
TABLE 073
Germany
UK
Other
Total
in € million
Current service cost
Past service cost (+) and income (–) from
plan amendments
Past service cost (+) and income (–) from
curtailments
Total service cost
Interest expense on defined benefit obligation
Interest income on plan assets
Net interest expense (+) / income (–)
Total cost of defined benefit
obligation
2014
1.1
0.1
–
1.2
18.7
2014
19.1
3.4
–
22.5
21.3
– 2.1
19.2
2013
18.3
–
–
18.3
19.6
– 2.1
17.5
2013
1.2
2014
3.1
2013
3.4
2014
23.4
2013
23.0
0.3
– 0.9
– 1.3
2.6
– 1.0
– 0.7
0.8
17.1
–
2.2
2.8
– 1.7
1.1
–
2.1
2.5
– 1.4
1.1
–
26.0
42.7
– 0.7
21.2
39.2
– 23.4
– 21.6
19.3
17.6
– 19.6
– 18.1
– 1.0
– 1.0
41.7
35.8
0.3
– 0.2
3.3
3.2
45.3
38.8
Accumulated other comprehensive income (loss)
TABLE 074
Germany
UK
Other
Total
in € million
2014
2013
2014
2013
2014
2013
2014
2013
Accumulated other comprehensive
income / loss as at 01/01/
Group changes
Exchange differences
Gains (+) and losses (–) arising from remeasure-
ments of defined benefit obligation
thereof effect of changes in demographic
assumptions
thereof effect of changes in financial
assumptions
thereof experience adjustments
Gains (+) and losses (–) arising from remeasure-
ments of plan assets
Accumulated other comprehensive
income / loss as at 31/12/
– 114.8
– 118.0
– 44.1
– 37.0
– 14.4
– 20.2
– 173.3
– 175.1
–
–
–
–
5.3
– 3.1
–
0.6
–
– 0.1
–
0.1
5.3
– 3.2
–
0.7
– 188.0
4.7
– 38.0
– 11.0
– 22.0
5.0
– 247.9
– 1.3
–
–
– 0.2
2.7
– 0.2
0.1
– 0.4
2.8
– 194.4
6.4
9.7
– 5.0
– 37.8
– 13.2
– 21.8
0.1
– 0.5
– 0.0
4.1
0.9
– 254.0
6.4
0.6
– 4.7
2.6
– 1.5
35.5
3.3
8.8
0.6
46.9
2.4
– 300.1
– 114.8
– 44.4
– 44.1
– 27.8
– 14.4
– 372.3
– 173.3
We keep the world moving.KION GROUP AG | Annual Report 2014
182
The gains and losses on the remeasurement of plan assets are
attributable entirely to experience adjustments. The changes in
estimates relating to defined benefit pension entitlements resulted
in a €138.3 million decrease in equity as at 31 December 2014
after deduction of deferred taxes (31 December 2013: increase
of €0.7 million).
Composition of plan assets
The plan assets of the main pension plans consist of the following
components: > TABLE 075
Fair value of plan assets
TABLE 075
in € million
Securities
Fixed-income securities
Real estate
Insurance policies
Other
Total plan assets
thereof total assets that do not have a quoted
price in active markets
Insurance policies
Other
Germany
UK
Other
Total
2014
25.7
28.4
4.8
–
14.6
73.6
9.0
–
9.0
2013
20.6
25.9
4.4
–
14.1
65.0
9.0
–
9.0
2014
83.8
2013
96.0
368.3
344.8
–
–
–
–
3.4
0.8
455.5
441.6
–
–
–
–
–
–
2014
2013
10.1
12.0
4.3
43.9
3.6
73.8
44.7
43.9
0.9
8.4
12.1
4.0
33.9
3.2
61.7
34.7
33.9
0.8
2014
119.7
408.7
9.1
43.9
21.6
2013
125.0
382.8
8.4
33.9
18.2
603.0
568.3
53.7
43.9
9.9
43.7
33.9
9.8
The plan assets do not include any real estate or other assets
used by the KION Group itself.
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
183
Sensitivity analysis
Future pension benefit payments
The present value of the defined benefit obligation is based on
The pension benefit payments shown in > TABLE 077 are forecast
the significant assumptions detailed in > TABLE 067 above. If one
for the next ten years for the defined benefit pension entitlements
assumption were to vary and the other assumptions remained
in existence as at 31 December 2014. The expected pension ben-
unchanged, the impact on the present value of the defined benefit
efits break down into future benefits to be paid directly by the
obligation would be as shown in > TABLE 076.
employer (for 2015: €15.3 million) and future benefits to be paid
The sensitivity analysis shown in > TABLE 076 is not represent-
from existing plan assets (for 2015: €19.7 million).
ative of an actual change in the present value of the defined
As at the reporting date, the weighted average duration of the
benefit obligation because variations in the significant assump-
obligation was 21.7 years in Germany (2013: 19.8 years), 13.6
tions are unlikely to occur in isolation as, to some extent, the
years in the United Kingdom (2013: 14.7 years) and 17.1 years in
assumptions are interrelated. Sensitivity is determined using the
the other countries (2013: 15.1 years).
same methods (projected unit credit method) as for the measure-
ment of the obligation recognised in the consolidated statement
of financial position as at 31 December 2014.
Sensitivity defined benefit obligation
in € million
Discount rate
Salary increase rate
Pension increase rate
Increase by 1.0 percentage point
Reduction by 1.0 percentage point
Increase by 0.5 percentage point
Reduction by 0.5 percentage point
Increase by 0.25 percentage point
Reduction by 0.25 percentage point
Life expectancy
Increase by 1 year
Expected payments for pension benefits
in € million
2015
2016
2017
2018
2019
2020 to 2024
Germany
14.4
15.8
16.8
17.9
19.1
UK
17.4
17.8
18.3
18.8
19.3
120.1
104.7
TABLE 076
2013
– 159.4
207.8
12.9
– 11.7
32.7
– 27.5
34.1
TABLE 077
Total
34.9
37.6
39.6
40.6
43.3
250.4
2014
– 218.3
290.6
17.2
– 17.9
39.5
– 35.7
44.7
Other
3.1
4.0
4.5
3.9
4.9
25.5
We keep the world moving.KION GROUP AG | Annual Report 2014
184
Risks
[29] FINANCIAL LIABILITIES
The funding ratio, the defined benefit obligation and the asso-
ciated costs depend on the performance of financial markets.
The return on plan assets is assumed to equal the discount
The financial liabilities reported by the KION Group as at 31 Decem-
rate, which is determined on the basis of the yield earned on
ber 2014 essentially comprised interest-bearing liabilities to banks
AA-rated, investment-grade, fixed-interest corporate bonds. If
and capital market liabilities in connection with the corporate
the actual return on plan assets falls below the discount rates
bond that was issued. The liabilities to banks stemmed largely
applied, the net obligation arising out of the pension plans
from the revolving credit facility.
increases. The amount of the net obligation is also particularly
> TABLE 078 shows the contractual maturity structure of the
affected by the discount rates, and the current low level of
financial liabilities.
interest rates – especially in the eurozone – is resulting in a
comparatively large net obligation.
The plan assets are predominantly invested in corporate
bonds and inflation-linked UK government bonds, particularly in
the United Kingdom. The market risk attaching to plan assets –
above all in the case of equities – is mitigated by defining an
investment strategy and guidelines and constantly monitoring the
assets’ performance. Moreover, a downward trend on financial
markets could have a significant effect on minimum funding
requirements, some of which apply outside Germany.
The KION Group also bears the full risk of possible future pen-
sion adjustments resulting from changes in longevity and inflation.
Payroll-based contributions to the KION pension plan made
by employees in Germany are invested in fund units. If the actual
returns on these fund units fall below the interest rate of
3.0 per cent that has been guaranteed to participating employ-
ees, the KION Group’s personnel expenses rise.
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
185
Maturity structure of financial liabilities
TABLE 078
in € million
Liabilities to banks
due within one year
due in one to five years
due in more than five years
Corporate bond
due within one year
due in one to five years
due in more than five years
Other liabilities
due within one year
due in one to five years
due in more than five years
Total current liabilities
Total non-current liabilities
Liabilities to banks
2014
459.9
257.7
202.2
–
443.1
–
–
443.1
6.6
5.1
1.2
0.2
262.9
646.8
2013
233.7
224.6
9.1
–
958.3
–
319.5
638.8
6.6
2.9
–
3.7
227.5
971.1
for €1,045.0 million that will mature in mid-2018. In connection with
the repayment of two corporate bonds in April 2014, the credit
In connection with its acquisition of Linde AG’s material handling
facility was increased by €198.0 million to a total of €1,243.0 mil-
business, the KION Group signed a loan agreement (a senior
lion. This was achieved through bilateral lending agreements with
facilities agreement and a subordinated facility agreement,
a group of banks. These additional loans mature in April 2019 and
referred to below as ‘SFA’) for a total original amount of
have a variable interest rate. As at 31 December 2014, an amount
€3,300.0 million with the lead banks Barclays Bank PLC, Bayeri-
of €402.0 million had actually been drawn down from the revolv-
sche Hypo- und Vereinsbank AG, Credit Suisse (London branch),
ing credit facility, which includes other loan liabilities and contin-
Goldman Sachs International Bank, Lehman Commercial Paper
gent liabilities (31 December 2013: €184.4 million). Of this total,
Inc. (UK branch) and Mizuho Corporate Bank Ltd. on 23 Decem-
€204.0 million had been drawn down on a short-term basis (31
ber 2006. This loan agreement has been amended to reflect the
December 2013: €184.4 million). The long-term drawdowns from
KION Group’s changed financial circumstances on a number of
the credit facility amounted to €198.0 million (31 December 2013:
occasions, particularly in connection with KION GROUP AG’s
€0.0 million) and were used in April 2014 to repay the floating-rate
IPO in June 2013.
tranche of the corporate bond issued in 2013, which was due to
In the previous year, the KION Group had agreed a variable -
mature in 2020 and had a volume of €200.0 million. Arrangement
rate revolving credit facility with a group of banks under the SFA
of the revolving credit facility of €1,045.0 million in 2013 had
We keep the world moving.KION GROUP AG | Annual Report 2014
186
resulted in directly attributable transaction costs of €9.3 million.
€8.4 million representing the proportion of the related deferred
The transaction costs directly attributable to the increase in the
borrowing costs relating to these bonds and a payment of
revolving credit facility came to €1.0 million. The transaction costs
€14.8 million representing early repayment charges were recog-
are recognised as prepaid expenses under current financial
nised as financial expenses.
assets and expensed over the term of the credit facility.
The fixed-rate tranche of the bond issued in 2013, which has
a volume of €450.0 million and a maturity date of 2020, remained
unchanged as at 31 December 2014.
Capital market liabilities
In April 2014, the fixed-rate tranche of the corporate bond issued
Changes in net financial debt
in 2011, which was due to mature in 2018 and had a volume of
€325.0 million, and the floating-rate tranche of the corporate
The KION Group uses its net financial debt as a key internal figure
bond issued in 2013, which was due to mature in 2020 and had a
for analysing the changes in its financial liabilities. Net financial
volume of €200.0 million, were repaid early in full. Most (€523 mil-
debt is defined as the difference between financial liabilities
lion) of the funds used for the repayment were drawn down from
(excluding lease liabilities) and cash and cash equivalents.
the revolving credit facility. This credit facility currently has far
The table below gives a breakdown of the KION Group’s net
lower interest rates than the two corporate bonds. An amount of
financial debt as at 31 December 2014: > TABLE 079
Net financial debt
in € million
Corporate bond – fixed rate (2011/2018) – gross
Corporate bond – fixed rate (2013/2020) – gross
Corporate bond – floating rate (2013/2020) – gross
Liabilities to banks (gross)
Liabilities to non-banks (gross)
./. Capitalised borrowing costs
Financial debt
./. Cash and cash equivalents
Net financial debt
TABLE 079
2013
325.0
450.0
200.0
233.7
6.6
– 16.7
1,198.6
219.3
979.3
2014
–
450.0
–
459.9
6.6
– 6.9
909.6
98.9
810.7
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
187
The table below gives details of the changes in financial debt and
lists the applicable terms and conditions: > TABLE 080
Credit terms
in € million
Interest rate
Notional amount
Maturity
TABLE 080
Term Loan Facility H1a (Corporate bond – fixed rate)
Term Loan Facility H2a (Corporate bond – fixed rate)
Fixed rate
Fixed rate
Term Loan Facility H2b (Corporate bond – floating rate) 3-M-EURIBOR+Margin
Multicurrency Revolving Credit Facility 3
EURIBOR + Margin
Other liabilities to banks
Financial liabilities to non-banks
./. Capitalised borrowing costs
Total financial debt
Various currencies and
interest terms
2018
2020
2020
2018
2014
–
450.0
–
373.0
86.9
6.6
– 6.9
909.6
2013
325.0
450.0
200.0
130.0
103.7
6.6
– 16.7
1,198.6
We keep the world moving.KION GROUP AG | Annual Report 2014
188
Financial covenants
The collateral includes guarantees, the assignment of shares
in the guarantors (with the exception of shares in KION Material
The SFA and the contractual terms and conditions governing the
Handling GmbH (formerly KION GROUP GmbH)), the assignment
issuance of the corporate bond require compliance with certain
of certain bank accounts and certain guarantor receivables, the
undertakings and covenants. The SFA also requires compliance
assignment of claims arising from and in connection with the
with specific financial covenants during the term of the agreement.
share purchase agreement between Linde Material Handling
The financial covenants specify required ratios for the financial
GmbH and Linde AG dated 5 November 2006 relating to the
position and financial performance of the KION Group. Only the
shares in the former KION GROUP GmbH, the assignment of
financial covenant for gearing (the ratio of net financial debt to
shares in KION Information Management Services GmbH and
EBITDA) currently applies to the KION Group. If undertakings or
assignments and transfers of title to intellectual property rights by
financial covenants are breached, this may, for example, give
guarantors in Germany. The statutory provisions in the United
lenders the right to terminate the SFA or permit bondholders to
Kingdom and the agreements entered into mean that all the
call the corporate bond prior to its maturity date.
assets of the UK guarantors are pledged as security.
The financial covenants are reviewed every quarter. All the
The carrying amounts of the financial assets pledged as
undertakings and financial covenants were complied with in the
collateral amounted to €340.8 million as at the reporting date
past financial year.
(31 December 2013: €348.7 million).
As had been the case at the end of 2013, no material liabilities
to banks were secured by mortgage charges at the end of 2014.
Loan collateral
Under the SFA, the KION Group is under an obligation to provide
collateral for its obligations and liabilities. This obligation also
extends to the corporate bond (tranche H2a). By the reporting
date, a total of 25 (31 December 2013: 26) KION Group companies
(guarantors) in five countries – Germany, the UK, France, Spain
and Italy – had provided the necessary collateral.
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
189
[30] LEASE LIABILITIES
Lease liabilities relate solely to finance lease obligations arising
from sale and leaseback transactions for the funding of long-term
leases with end customers.
The amounts recognised as lease liabilities (the present value
of future minimum lease payments) are based on the following
data: > TABLE 081
Minimum lease payments
in € million
Total minimum lease payments (gross)
due within one year
due in one to five years
due in more than five years
Present value of minimum lease payments
due within one year
due in one to five years
due in more than five years
TABLE 081
2013
683.8
241.1
425.6
17.1
617.1
213.3
387.3
16.4
2014
768.2
271.9
475.9
20.5
707.7
246.0
442.0
19.7
Interest included in minimum lease payments
60.5
66.7
Whereas lease liabilities stood at €707.7 million (31 Decem-
ber 2013: €617.1 million), lease receivables arising from sale and
leaseback transactions amounted to €490.6 million (31 Decem-
ber 2013: €431.4 million) and leased assets under sale and lease-
back transactions totalled €230.5 million (31 December 2013:
€201.2 million).
We keep the world moving.KION GROUP AG | Annual Report 2014
190
[31] OTHER PROVISIONS
Other provisions relate to the following items: > TABLE 082
Other provisions
TABLE 082
in € million
Balance as at 01/01/2014
thereof non-current
thereof current
Group changes
Additions
Utilisations
Reversals
Additions to accrued interest
Currency translation adjustments
Other adjustments
Balance as at 31/12/2014
thereof non-current
thereof current
Provisions
for product
warranties
Provisions for
personnel
Other
obligations
Total other
provisions
53.8
53.5
0.4
– 0.4
21.6
– 18.0
– 4.8
0.0
1.1
– 0.1
53.3
53.3
–
66.4
18.1
48.3
– 1.5
24.6
– 23.7
– 2.1
1.5
0.2
–
65.5
24.1
41.4
68.0
6.3
61.6
– 3.7
13.5
– 17.7
– 12.3
0.0
1.5
0.1
49.3
6.3
43.0
188.2
77.8
110.3
– 5.5
59.6
– 59.4
– 19.1
1.5
2.8
– 0.0
168.1
83.7
84.4
The provisions for product warranties include contractual and
Other obligations comprise, among others, provisions for
statutory obligations arising from the sale of industrial trucks and
restructuring, litigation and expected losses from onerous
spare parts. It is expected that the bulk of the costs will be
contracts.
incurred within the next two years after the reporting date.
Total restructuring provisions (including obligations under
The provisions for personnel comprise provisions for partial
social plans and termination benefits) came to €26.7 million as at
retirement obligations, long-service awards, annual bonuses,
31 December 2014 (31 December 2013: €43.7 million).
severance pay, obligations under social plans and obligations
under the employee equity programmes. The provisions for par-
tial retirement obligations are recognised on the basis of individ-
ual contractual arrangements and agreements under collective
bargaining law.
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
191
[32] TRADE PAYABLES
[33] OTHER FINANCIAL LIABILITIES
As at 31 December 2014, trade payables of €564.6 million
Other financial liabilities comprise the following items: > TABLE 083
(31 December 2013: €550.5 million) included liabilities to affiliated
companies of €3.8 million (31 December 2013: €4.5 million) and
liabilities to other long-term equity investments of €4.4 million
(31 December 2013: €6.0 million).
Other financial liabilities
in € million
Liabilities from finance leases
Deferred income
Sundry other liabilities
Derivative financial instruments
Other non-current liabilities
Liabilities from finance leases
Deferred income
Personnel liabilities
Derivative financial instruments
Social security liabilities
Tax liabilities
Advances received from third parties
Liabilities on bills of exchange
Liabilities from accrued interest
Sundry current financial liabilities
Other current liabilities
Total other liabilities
TABLE 083
2013
220.0
139.4
5.6
27.2
392.1
143.0
81.3
160.7
1.9
36.4
66.3
32.4
1.8
18.9
33.4
2014
231.6
151.2
2.6
2.4
387.8
141.5
84.5
167.3
10.9
36.6
60.3
39.2
2.0
12.2
49.3
603.9
576.0
991.7
968.1
We keep the world moving.KION GROUP AG | Annual Report 2014
192
The non-current derivative financial instruments include a call
lion (2013: €327.5 million) and residual value obligations of
option on a portion of the shares in Linde Hydraulics amounting
€18.5 million (2013: €17.3 million). The KION Group has also
to €2.4 million (2013: €22.6 million). The current derivative finan-
recognised other financial liabilities amounting to €15.6 million
cial instruments include another call option on a portion of the
(31 December 2013: €18.2 million) arising from procurement
shares in Linde Hydraulics amounting to €0.6 million. In the
leases, which are classified as finance leases due to their terms
previous year, the latter call option had been reported under non-
and conditions.
current derivative financial instruments in an amount of €4.7 million.
The finance lease obligations are based on the following
The finance lease obligations comprise liabilities arising from
future minimum lease payments: > TABLE 084
the financing of industrial trucks for short-term rental of €339.1 mil-
Minimum lease payments
in € million
Total minimum lease payments (gross)
due within one year
due in one to five years
due in more than five years
Present value of minimum lease payments
due within one year
due in one to five years
due in more than five years
TABLE 084
2013
402.2
159.3
235.3
7.5
363.0
143.0
212.9
7.1
2014
405.0
155.1
239.7
10.2
373.1
141.5
221.8
9.8
Interest included in minimum lease payments
31.9
39.2
Other financial liabilities include other non-derivative financial
liabilities of €169.0 million (31 December 2013: €161.1 million) that
fall within the scope of IFRS 7.
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
193
[34] CONTINGENT LIABILITIES
AND OTHER FINANCIAL COMMIT-
MENTS
Contingent liabilities
Litigation
The legal risks arising from the KION Group’s business are typical
of those faced by any company operating in this sector. The
Group companies are a party in a number of pending lawsuits in
various countries. The individual companies cannot assume with
any degree of certainty that they will win any of the lawsuits or that
the existing risk provision in the form of insurance or provisions
The increase in guarantees essentially resulted from a new guar-
will be sufficient in each individual case. However, the KION
antee granted to the trustees of UK pension funds in 2014. Of
Group believes it is unlikely that these ongoing lawsuits will require
the total guarantees, €0.9 million related to contingent liabilities
funds to be utilised that exceed the provisions recognised.
assumed jointly with another shareholder of a joint venture
(2013: €2.1 million). > TABLE 085
Contingent liabilities
in € million
Liabilities on bills of exchange
Liabilities on guarantees
Collateral security for third-party liabilities
Total contingent liabilities
TABLE 085
2013
1.1
4.5
0.2
5.8
2014
5.6
21.0
–
26.7
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194
Other financial commitments
Sundry other financial commitments included future payment
obligations to an associate amounting to €21.0 million (2013:
€0.0 million). > TABLE 086
Other financial commitments
in € million
Commitments under non-cancellable operating leases
Capital expenditure commitments in property, plant and equipment
Capital expenditure commitments in intangible assets
Other financial commitments
Total other financial commitments
The maturity structure of the total future minimum lease payments
under non-cancellable operating leases is as follows: > TABLE 087
Minimum lease payments
in € million
Nominal minimum lease payments
due within one year
due in one to five years
due in more than five years
TABLE 086
2013
206.0
8.6
2.2
38.4
255.1
TABLE 087
2013
206.0
71.2
99.3
35.4
2014
250.8
10.3
1.9
65.0
327.9
2014
250.8
61.4
114.8
74.5
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated statement of financial position
195
The minimum lease payments relate to payments for leased
buildings, machinery, office furniture and equipment (procure-
ment leases) as well as payments for industrial trucks refinanced
with a sale and leaseback and sub-leased to end customers (sale
and leaseback sub-leases). > TABLE 088
Minimum lease payments broken down into procurement leases & sale and leaseback sub-leases
TABLE 088
in € million
Minimum lease payments (cash out)
due within one year
due in one to five years
due in more than five years
Minimum lease payments (cash in)
due within one year
due in one to five years
due in more than five years
Procurement leases
Sale and leaseback sub-leases
2014
205.4
44.1
87.4
73.9
–
–
–
–
2013
145.3
38.5
71.4
35.4
–
–
–
–
2014
45.3
17.3
27.4
0.6
4.1
1.6
2.5
0.0
2013
60.7
32.7
27.9
0.0
3.9
1.7
2.2
0.0
The future minimum lease payments for sale and leaseback
transactions not recognised in the statement of financial position
amounting to €45.3 million (2013: €60.7 million) are partially
offset by payments received under non-cancellable sub-leases
amounting to €4.1 million (2013: €3.9 million). The future pay-
ments also include obligations arising from the refinancing of
industrial trucks for which there are no offsetting receipts under
short-term sub-leases.
We keep the world moving.KION GROUP AG | Annual Report 2014
196
Other disclosures
[35] CONSOLIDATED STATEMENT
OF CASH FLOWS
Net cash used for investing activities amounted to €297.8 mil-
lion (2013: net cash used of €310.7 million). Capital expenditure
on developments (R&D), property, plant and equipment, and the
rental fleet business (net) rose by €20.5 million year on year. In the
previous year, net cash totalling €25.1 million had been used to
The consolidated statement of cash flows shows the changes in
acquire Arser and the remaining shares in Willenbrock. The pro-
cash and cash equivalents in the KION Group resulting from cash
ceeds from the disposal of non-current assets primarily related to
inflows and outflows in the year under review, broken down into
disposals of assets no longer required for the Group’s operating
cash flow from operating, investing and financing activities. At the
activities. Other inflows from investing activities related to the dis-
start of 2014, changes were made to how information is disclosed
posal of an equity investment of the Willenbrock Group and divi-
in the three categories. The LMH and STILL brand segments
dend payments from equity investments.
have operational responsibility for the short-term rental business
Free cash flow – the sum of cash flow from operating activi-
(rental assets) and use it to generate operating income – in the
ties and investing activities – increased by €110.3 million to
same way as they would with capital expenditure on property,
€305.9 million in the reporting period (2013: €195.6 million). As in
plant and equipment. That is why the change relating to the rental
2013, a large part of it was used for repayments.
fleet business (net disbursals) will be reported in cash flow from
At minus €428.1 million, cash flow from financing activities
investing activities in future. The figures for 2013 have been
was down significantly on the prior-year figure (2013: minus
restated to reflect this disclosure change. As a result, cash flow
€531.6 million), which had been particularly affected by the IPO
from operating activities in 2013 has improved by €170.3 million,
and the restructuring of financial debt. The net repayment of
while cash flow from investing activities has decreased by the
financial debt in the year under review totalled €301.2 million
same amount. In addition, interest received has been reclassified
(2013: €1,105.7 million). The financial debt taken up during the
from cash flow from investing activities to cash flow from financ-
year, which came to €1,375.2 million, was more than offset by
ing activities because the KION Group’s cash and cash equiva-
repayments totalling €1,676.4 million. These repayments included
lents are also used to repay existing financial debt. Accordingly,
€525.0 million in respect of the early redemption of the bond
both interest payments and interest received will, as a component
tranches plus early repayment charges of €14.8 million. Net cash
of financing, be allocated to cash flow from financing activities in
of €82.5 million was also used for regular interest payments (2013:
future. As a result, cash flow from investing activities in 2013 has
€112.6 million). The distribution of a dividend of €0.35 per share
decreased by €7.0 million, while cash flow from financing activi-
resulted in an outflow of funds of €34.5 million, while the acquisi-
ties has increased by the same amount.
tion of 51,000 treasury shares generated an outflow of €1.5 million.
The effects on cash from changes in exchange rates are
Despite favourable currency effects of €1.8 million (2013:
shown separately. Cash flow from operating activities is pre-
adverse currency effects of €7.0 million), this resulted overall in a
sented using the indirect method in which the profit or loss for the
sharp contraction in cash and cash equivalents, which fell from
year is adjusted for non-cash operating items.
€219.3 million as at the end of 2013 to €98.9 million as at
The KION Group’s net cash provided by operating activities
31 December 2014.
totalled €603.8 million, which was significantly higher than the pri-
or-year figure of €506.3 million after restatement to reflect the
rental assets. The main reason for this was the €68.8 million
decrease in tax payments, which had a positive impact on cash
flow. This decrease was due to the fact that there had been one-
off tax payments in the previous year in connection with the sale
of the hydraulics business. A higher level of working capital at the
reporting date had the effect of reducing cash flow.
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
197
Other disclosures
[36] INFORMATION ON FINANCIAL
INSTRUMENTS
The KION Group uses both primary and derivative financial instru-
ments. The following section summarises the relevance of these
financial instruments for the KION Group.
The following table shows the measurement categories
defined by IAS 39. In line with IFRS 7, the table shows the carrying
amounts and fair values of financial assets and liabilities:
> TABLES 089 – 090
Carrying amounts broken down by class and category 2014
TABLE 089
Classes
in € million
Financial assets
Investments in non-consolidated subsidiaries /
Other investments
Loans receivable
Financial receivables
Non-current securities
Lease receivables *
Trade receivables
Other receivables
thereof non-derivative receivables
thereof derivative receivables
Cash and cash equivalents
Financial liabilities
Liabilities to banks
Corporate bond
Other financial liabilities to non-banks
Lease liabilities *
Trade payables
Other liabilities
thereof non-derivative liabilities
thereof liabilities from finance leases *
thereof derivative liabilities
* as defined by IAS 17
Carrying
amount
FAHfT
AfS
LaR
FLaC
FLHfT
Fair value
Categories
11.4
0.6
12.4
0.8
547.8
598.2
106.0
62.3
43.7
98.9
459.9
443.1
6.6
707.7
564.6
555.4
169.0
373.1
13.3
11.4
0.8
0.6
12.4
598.2
62.3
98.9
42.8
11.4
0.6
12.4
0.8
549.2
598.2
106.0
62.3
43.7
98.9
460.0
490.0
6.6
711.2
564.6
557.2
169.0
374.9
13.3
459.9
443.1
6.6
564.6
169.0
5.4
We keep the world moving.KION GROUP AG | Annual Report 2014 198
Carrying amounts broken down by class and category 2013
TABLE 090
Classes
in € million
Financial assets
Investments in non-consolidated subsidiaries /
Other investments
Loans receivable
Financial receivables
Non-current securities
Lease receivables *
Trade receivables
Other receivables
thereof non-derivative receivables
thereof derivative receivables
Cash and cash equivalents
Financial liabilities
Liabilities to banks
Corporate bond
Other financial liabilities to non-banks
Lease liabilities *
Trade payables
Other liabilities
thereof non-derivative liabilities
thereof liabilities from finance leases *
thereof derivative liabilities
* as defined by IAS 17
Carrying
amount
FAHfT
AfS
LaR
FLaC
FLHfT
Fair value
Categories
11.9
0.8
11.6
0.8
479.6
558.7
55.0
35.7
19.4
219.3
233.7
958.3
6.6
617.1
550.5
553.1
161.1
363.0
29.1
11.9
0.8
0.8
11.6
558.7
35.7
219.3
18.0
11.9
0.8
11.6
0.8
478.4
558.7
55.0
35.7
19.4
219.3
234.1
1,040.8
6.6
619.2
550.5
554.2
161.1
364.1
29.1
233.7
958.3
6.6
550.5
161.1
28.0
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
199
Other disclosures
The change in valuation allowances for trade receivables was as
follows: > TABLE 091
Change in valuation allowances
in € million
Valuation allowances as at 01/01/
Group changes
Additions (cost of valuation allowances)
Reversals
Utilisations
Currency translation adjustments
Valuation allowances as at 31/12/
The net gains and losses on financial instruments are broken
down by IAS 39 category as follows: > TABLE 092
Net gains and losses on financial instruments broken down by category
in € million
Loans and receivables (LaR)
Financial instruments held for trading (FAHfT, FLHfT)
Financial liabilities carried at amortised cost (FLaC)
The above net gains and losses do not include losses arising
on hedging transactions, which amounted to €7.5 million (2013:
€26.7 million), because these losses form part of a docu-
mented hedge.
TABLE 091
2013
50.5
– 0.2
9.4
– 7.5
– 9.2
– 0.7
42.4
TABLE 092
2013
11.0
– 14.2
– 152.9
2014
42.4
–
7.1
– 4.6
– 5.1
0.3
40.2
2014
– 4.8
54.6
– 103.5
We keep the world moving.KION GROUP AG | Annual Report 2014
200
Offsetting of financial instruments
cial collateral issued relates to collateral provided in the context of
the SFA serving as collateral in case of default for the creditors of
The potential offsetting volume essentially arises from netting
all SFA tranches (including H2a), subject to the usual limitations
arrangements in framework agreements governing derivatives
and agreed recovery principles. The following tables show actual
trading that the KION Group concludes with commercial banks.
offsetting and potential offsetting volumes for financial assets and
The potential offsetting volume reported in connection with finan-
financial liabilities. > TABLES 093 – 096
Financial assets subject to offsetting, enforceable master netting
arrangements and similar agreements
TABLE 093
Potential net amount
Gross
amounts of
recognised
financial
liabilities set
off in the
balance sheet
Net
amounts of
financial assets
presented in
the balance
sheet
Gross
amounts of
recognised
financial
assets
owing to
netting
agreements
in connection
with financial
collaterals
received
Potential
net amount
in € million
Trade receivables
Derivative financial assets
Total
598.3
43.7
642.0
– 0.1
–
– 0.1
31/12/2014
598.2
43.7
641.9
– 0.0
– 5.8
– 5.8
–
–
–
598.2
37.9
636.2
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
201
Other disclosures
Financial assets subject to offsetting, enforceable master netting
arrangements and similar agreements
TABLE 094
Potential net amount
Gross
amounts of
recognised
financial
liabilities set
off in the
balance sheet
Net
amounts of
financial assets
presented in
the balance
sheet
Gross
amounts of
recognised
financial
assets
owing to
netting
agreements
in connection
with financial
collaterals
received
Potential
net amount
in € million
Trade receivables
Derivative financial assets
Total
560.8
19.4
580.1
– 2.1
–
– 2.1
31/12/2013
558.7
19.4
578.1
–
– 0.9
– 0.9
–
–
–
558.7
18.5
577.2
Financial liabilities subject to offsetting, enforceable master netting
arrangements and similar agreements
TABLE 095
Potential net amount
Gross
amounts of
recognised
financial
assets set
off in the
balance sheet
Net amounts
of financial
liabilities
presented in
the balance
sheet
Gross
amounts of
recognised
financial
liabilities
owing to
netting
agreements
in connection
with financial
collaterals
pledged
Potential
net amount
in € million
Financial liabilities
Trade payables
Derivative financial liabilities
Total
909.6
564.7
13.3
1,487.6
–
– 0.1
–
– 0.1
31/12/2014
909.6
564.6
13.3
1,487.5
–
– 0.0
– 5.8
– 5.8
– 340.8
–
–
568.8
564.6
7.5
– 340.8
1,140.9
We keep the world moving.KION GROUP AG | Annual Report 2014
202
Financial liabilities subject to offsetting, enforceable master netting
arrangements and similar agreements
TABLE 096
Potential net amount
Gross
amounts of
recognised
financial
assets set
off in the
balance sheet
Net amounts
of financial
liabilities
presented in
the balance
sheet
Gross
amounts of
recognised
financial
liabilities
owing to
netting
agreements
in connection
with financial
collaterals
pledged
Potential
net amount
in € million
Financial liabilities
Trade payables
Derivative financial liabilities
Total
1,198.6
552.6
29.1
1,780.3
–
– 2.1
–
– 2.1
31/12/2013
1,198.6
550.5
29.1
1,778.2
–
–
– 0.9
– 0.9
– 348.7
–
–
849.9
550.5
28.2
– 348.7
1,428.7
Fair value measurement
The fair value of receivables and liabilities from finance leases
corresponds to the present value of the net lease payments, tak-
The majority of the cash and cash equivalents, loans receivable,
ing account of the current market interest rate for similar leases.
other non-derivative receivables and liabilities, trade receivables
With the exception of derivative financial instruments and
and trade payables held by the Group have short remaining terms
long-term securities, all financial assets and liabilities are meas-
to maturity. The carrying amounts of these financial instruments
ured at amortised cost.
are roughly equal to their fair values. The fair value of liabilities to
The following tables show the assignment of fair values to the
banks corresponds to the present value of the outstanding pay-
individual classification levels as defined by IFRS 7 for financial
ments, taking account of the current interest-rate curve and the
instruments measured at fair value. > TABLES 097 – 098
Group’s own default risk. This fair value, calculated for the pur-
poses of disclosure in the notes to the financial statements, is
classified as level 2 of the fair value hierarchy.
The fair value of the corporate bonds issued, calculated for
disclosure in the notes to the financial statements, is determined
using publicly quoted prices in an active market and is therefore
classified as level 1 of the fair value hierarchy. The calculation is
based on the middle rate applicable on the reporting date.
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
203
Other disclosures
Financial instruments measured at fair value
TABLE 097
in € million
Financial assets
thereof non-current securities
thereof derivative instruments
Financial liabilities
thereof derivative instruments
Fair Value Hierarchy
Level 1
Level 2
Level 3
0.8
9.0
34.7
10.3
3.0
2014
44.5
0.8
43.7
13.3
13.3
Financial instruments measured at fair value
TABLE 098
in € million
Financial assets
therof non-current securities
thereof derivative instruments
Financial liabilities
thereof derivative instruments
Fair Value Hierarchy
Level 1
Level 2
Level 3
0.8
3.6
1.9
15.7
27.2
2013
20.2
0.8
19.4
29.1
29.1
We keep the world moving.KION GROUP AG | Annual Report 2014
204
Level 1 comprises long-term securities for which the fair value is
in Linde Hydraulics. The Black-Scholes model and probability-
calculated using prices quoted in an active market.
weighted scenario analysis are used to calculate the fair value of
Interest-rate swaps and currency forwards are classified as
the put option and the two call options. The measurement is
Level 2. The fair value of derivative financial instruments is deter-
based on the following significant, unobservable input para-
mined using appropriate valuation methods on the basis of the
meters as at 31 December 2014. An amount of €64.1 million
observable market information at the reporting date. The default
has been recognised as the fair value of the shares in Linde
risk for the Group and for the counterparty is taken into account
Hydraulics, both for the put option and for the two call options
on the basis of gross figures. The fair value of interest rate swaps
(31 December 2013: €116.1 million). A base exercise price of
is calculated as the present value of the estimated future cash
€77.4 million (31 December 2013: €77.4 million) and a term to
flows. Both contractually agreed payments and forward interest
maturity of 0.49 – 2.49 years (31 December 2013: 1.49 – 3.49
rates are used to estimate the future cash flows, which are then
years) have been assumed for the put option. For the measure-
discounted on the basis of a yield curve that is observable in the
ment of call option 1, a base exercise price of €77.4 million
market. The KION Group no longer had any material interest-rate
(31 December 2013: €77.4 million) and a term to maturity of 2.99
hedging instruments in 2014 or as at 31 December 2013. The fair
years (31 December 2013: 3.99 years) were used, while a base
value of currency forwards is calculated by the system using the
exercise price of €38.7 million (31 December 2013: €38.7 million)
discounting method based on forward rates on the reporting date.
and a term to maturity of 0.49 – 2.99 years (31 December 2013:
The financial assets and liabilities allocated to Level 3 relate to
1.49 – 3.99 years) were used for call option 2. The following table
a put option held by Linde Material Handling GmbH, Aschaffen-
shows the material changes in fair value and the impact on the
burg, and two call options held by Weichai Power on the shares
income statement. > TABLE 099
Development of financial assets / liabilities classified as level 3
TABLE 099
in € million
Value as at 01/01/
Gains / losses recognised in net financial expenses
Value as at 31/12/
Gains / losses of the period relating to financial
assets / liabilities held as at 31/12/
Change in unrealised gains / losses for the period relating
to financial assets / liabilities held as at 31/12/
2014
– 11.5
43.2
31.7
43.2
43.2
2013
3.2
– 14.7
– 11.5
– 14.7
– 14.7
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
205
Other disclosures
As at 31 December 2014, the net value calculated for the options
on the shares in Linde Hydraulics came to €31.7 million (31 Decem-
ber 2013: minus €11.5 million). If the fair value of the shares had
been 10.0 per cent lower on the reporting date, the net value arising
[37] FINANCIAL RISK REPORTING
from the options would have increased by €5.3 million (31 Decem-
Capital management
ber 2013: €9.4 million) to €37.1 million (31 December 2013: minus
€2.1 million) and led to an additional gain of €5.3 million (31 Decem-
One of the prime objectives of capital management is to ensure
ber 2013: lower expense of €9.4 million). A 10.0 per cent rise in the
liquidity at all times. Measures aimed at achieving these objec-
fair value of the shares in Linde Hydraulics would have reduced the
tives include the optimisation of the capital structure, the reduc-
net value arising from the options by €5.6 million (31 Decem-
tion of liabilities and ongoing Group cash flow planning and man-
ber 2013: by €9.4 million) to €26.2 million (31 December 2013:
agement. The KION Group made further improvements to its
minus €20.9 million) and the gain would have decreased by
funding structure and funding conditions during the reporting
€5.6 million (31 December 2013: additional expense of €9.4 million).
year by repaying two corporate bonds ahead of schedule in April
In order to eliminate default risk to the greatest possible
2014. The funds used for the repayment mainly originated from a
extent, the KION Group only enters into derivatives with invest-
revolving credit facility, which currently has far lower interest rates
ment-grade counterparties.
than the two corporate bonds. Against this background, the
If events or changes in circumstances make it necessary to
revolving credit facility was increased by €198.0 million to a total
reclassify financial instruments as a different level, they are reclas-
of €1,243.0 million in April 2014 on the basis of bilateral lending
sified at the end of a reporting period. No financial instruments
agreements with a group of banks (see note [29]).
were transferred between Levels 1, 2 or 3 in 2014.
Close cooperation between local units and the Group head
office ensures that the local legal and regulatory requirements
faced by foreign group companies are taken into account in cap-
ital management.
Net financial debt – defined as the difference between finan-
cial liabilities (excluding lease liabilities) and cash and cash equiv-
alents – is the key performance measure used in liquidity planning
at Group level (see note [29]) and amounted to €810.7 million at
31 December 2014 (31 December 2013: €979.3 million).
We keep the world moving.KION GROUP AG | Annual Report 2014 206
Credit risk
The following table shows the age structure of receivables as
at the reporting date: > TABLE 100
In certain finance and operating activities, the KION Group is sub-
ject to credit risk, i.e. the risk that partners will fail to meet their
Impairment losses are based on the credit risk associated with
contractual obligations. This risk is limited by diversifying busi-
the receivables, the risk being assessed mainly using factors such
ness partners based on certain credit ratings. The Group only
as customer credit rating and failure to adhere to payment terms.
enters into transactions with business partners and banks hold-
Some of the receivables that were overdue as at the report-
ing a good credit rating and subject to fixed limits. Counterparty
ing date, but for which no impairment losses had been reported,
risks involving our customers are managed by the individual
were offset by corresponding trade payables. Apart from this
Group companies.
item, the Group did not hold any significant collateral.
Age structure analysis of receivables
TABLE 100
Thereof: Not impaired at the
reporting date, but
Thereof: Nei -
t her overdue
nor impaired at
the reporting
date
Carrying
amount
Thereof:
Overdue and
impaired at the
reporting date
up to and
including 90
days overdue
more than 90
days overdue
12.4
547.8
598.2
62.3
11.6
479.6
558.7
35.7
12.4
547.8
501.7
61.6
11.6
479.6
452.7
34.6
–
–
3.2
–
–
–
2.8
0.5
–
–
87.5
0.6
–
–
97.2
0.4
–
–
5.0
0.0
–
–
4.5
0.2
2014
2013
in € million
Financial receivables
Lease receivables
Trade receivables
Other non-derivative receivables
in € million
Financial receivables
Lease receivables
Trade receivables
Other non-derivative receivables
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
207
Other disclosures
Liquidity risk
April 2014, Moody’s upgraded its corporate family rating for the
KION Group from Ba3 to Ba2 with a stable outlook, while Standard
Based on IFRS 7, a liquidity risk arises if an entity is unable to
& Poor’s also improved its rating, from BB-/positive to BB/positive.
meet its financial liabilities. The KION Group maintains a liquidity
The following tables show all of the contractually agreed
reserve in the form of lines of credit and cash in order to ensure
payments under recognised financial liabilities as at 31 Decem-
financial flexibility and solvency. The age structure of financial
ber 2014 and 2013, including derivative financial instruments with
liabilities is reviewed continually. The KION Group’s credit rating
negative fair values. > TABLES 101 – 102
maintained its positive trajectory in the year under review. In
Liquidity analysis of financial liabilities and derivatives 2014
TABLE 101
in € million
Primary financial liabilities
Liabilities to banks
Corporate bond
Borrowing costs
Other financial liabilities
Trade payables
Lease liabilities
Other financial liabilities
Derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
Carrying amount
2014
Cash flow
2015
Cash flow
2016 – 2019
Cash flow
from 2020
459.9
450.0
– 6.9
903.0
6.6
564.6
707.7
542.1
10.3
– 262.4
– 30.5
– 214.1
– 121.3
–
– 465.2
– 5.1
– 564.6
– 271.9
– 324.2
– 1.3
–
– 475.9
– 239.7
270.2
– 280.0
4.2
– 4.2
– 0.2
–
– 20.5
– 10.2
–
–
We keep the world moving.KION GROUP AG | Annual Report 2014
208
Liquidity analysis of financial liabilities and derivatives 2013
TABLE 102
in € million
Primary financial liabilities
Liabilities to banks
Corporate bond
Borrowing costs
Other financial liabilities
Trade payables
Lease liabilities
Other liabilities
Derivative financial liabilities
Derivatives with negative fair value
+ Cash in
– Cash out
Carrying amount
2013
Cash flow
2014
Cash flow
2015 – 2018
Cash flow
from 2019
233.7
975.0
– 16.7
1,192.0
6.6
550.5
617.1
524.0
1.9
– 229.7
– 66.0
– 11.1
– 583.7
– 0.1
– 713.6
– 2.9
– 550.5
– 241.1
– 320.4
–
–
– 425.6
– 235.3
147.0
– 148.7
1.5
– 1.7
– 4.1
–
– 17.1
– 7.5
–
–
The calculation of future cash flows for derivative financial liabili-
primarily the provision of limited reserves for defaults. The recog-
ties includes all currency forwards that have negative fair values
nised assets that serve as reserves for defaults and are reported
as at the reporting date.
under other current financial assets, stood at €1.0 million as at
Bank guarantee lines (e.g. sureties, performance bonds)
31 December 2014 (31 December 2013: €1.0 million). However,
had been issued under the ancillary facility agreements for a
the short residual maturity of these financial assets meant their
total amount in the single-digit millions as at 31 December 2014
carrying amount was almost the same as their fair value. The
(31 Decem ber 2013: low double-digit millions). They included
maximum downside risk arising on the transferred and fully
guarantees payable ‘on first demand’. As was the case in the pre-
derecognised financial assets amounted to €5.0 million as at
vious year, no guarantees were utilised in 2014.
31 December 2014 (31 December 2013: €5.0 million).
In some cases, the KION Group retains insignificant rights
and duties in connection with fully derecognised financial assets,
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
209
Other disclosures
Default risk
Because of low default rates, counterparty risk has not been
significant to date in the Group. The Group did not identify any
For financial assets, default risk is defined as the risk that a coun-
material year-on-year changes in 2014. The KION Group’s losses
terparty will default, and hence is limited to a maximum of the car-
from defaults are also mitigated by its receipt of the proceeds
rying amount of the assets relating to the counterparty involved.
from the sale of repossessed trucks. In addition, it primarily offers
The potential default risk attaching to financial assets is mitigated
financial services indirectly via selected funding partners, and the
by secured forms of lending such as reservation of title, credit
KION Group bears the counterparty risk in less than 5 per cent of
insurance and guarantees, and potential netting agreements.
cases. The credit portfolio management system was updated
Specific valuation allowances for defaults are recognised to
during 2014. In particular, this involved revising procedures on
reflect the risk arising from primary financial instruments. Financial
operational and organisational structure as well as processes for
transactions are only entered into with selected partners holding
risk management and control.
good credit ratings. Investments in interest-bearing securities are
limited to securities with an investment-grade credit rating.
Currency risk
Risks arising from financial services
In accordance with its treasury risk policy, the KION Group
hedges currency risks both locally at the level of the individual
The KION Group’s leasing activities mean that it may be exposed
companies and centrally via KION Material Handling GmbH in
to residual value risks from the marketing of trucks that are
order to meet the prescribed minimum hedging ratios.
returned by the lessee at the end of a long-term lease and subse-
The main hedging instruments employed are foreign- currency
quently sold or re-leased. Residual values in the markets for used
forwards, provided that there are no country-specific restrictions
trucks are therefore constantly monitored and forecast.
on their use.
The KION Group regularly assesses its overall risk position
At company level, hedges are entered into for highly proba-
arising from financial services, recognising write-downs, valua-
ble future transactions on the basis of rolling 15-month forecasts,
tion allowances or provisions to cover the risks it identifies. It
as well as for firm obligations not reported in the statement of
immediately takes account of any changes in residual values
financial position. In accordance with IAS 39, these hedges are
when calculating new leases.
generally classified as cash flow hedges for accounting purposes
In addition, residual values are mainly based on remarketing
(see note [38]).
agreements, which continued to achieve positive outcomes in
Foreign-currency forwards are also employed to hedge the
2014. Any residual-value risk under these agreements is trans-
currency risks arising in the course of internal financing.
ferred to the external leasing company. Groupwide standards to
ensure that residual values are calculated conservatively reduce
risk and provide the basis on which to create the transparency
required. The KION Group also has an IT system for residu-
al-value risk management.
The KION Group mitigates its liquidity risk and interest-rate
risk by ensuring that most of its transactions and funding loans
have matching maturities. Long-term leases are primarily based
on fixed-interest agreements. The credit facilities provided by
various banks ensure that the Group has sufficient liquidity.
In order to exclude currency risk, the KION Group generally
funds its leasing business in the local currency used in each market.
We keep the world moving.KION GROUP AG | Annual Report 2014 210
The following table shows an overview of the foreign-currency
forwards entered into by the KION Group. > TABLE 103
Foreign-currency forwards
Fair value
Notional amount
in € million
Foreign-currency forwards (assets)
Foreign-currency forwards (liabilities)
2014
2013
Hedge
Trading
Hedge
Trading
0.9
8.1
7.7
2.3
1.3
2.3
0.7
0.8
2014
44.4
213.3
204.3
70.2
TABLE 103
2013
65.0
164.7
33.4
115.7
Significant currency risks from financial instruments are meas-
nated in a currency other than the functional currency of the
ured on the basis of value at risk (VaR). VaR figures are calculated
reporting entity concerned. This means that currency risks result-
using a historical variance-covariance matrix. Currency risks from
ing from the translation of the separate financial statements of
financial instruments as defined by IFRS 7 are only included in
subsidiaries into the Group reporting currency, i.e. currency
calculating value at risk if the financial instruments are denomi-
translation risks, are not included. > TABLE 104
Value-at-Risk
in € million
Currency risk
TABLE 104
2013
18.6
2014
19.7
The value at risk in respect of currency risk as at 31 December
2014 was €19.7 million (31 December 2013: €18.6 million). Value
at risk is the loss that is not expected to be exceeded over a hold-
ing period of one year with a confidence level of 97.7 per cent
(2013: 97.7 per cent).
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
211
Other disclosures
Interest-rate risk
The Group funds itself by, among other things, drawing down
loans under its agreed loan facilities. In the previous year, inter-
Interest-rate risk within the KION Group is managed centrally.
est-rate derivatives – mainly interest-rate swaps – were used to
The basis for decision-making includes sensitivity analyses of
hedge the resultant interest-rate risk. The corresponding inter-
interest-rate risk positions in key currencies.
est-rate hedging instruments were terminated upon repayment in
The cumulative effect of a rise or fall of 100 basis points
2013 of the floating-rate liabilities under the SFA, which means
(bps) in the relevant interest-rate curves results from floating-rate
that there were no material interest-rate hedging instruments as
positions and is shown in the following table: > TABLE 105
at 31 December 2013 or in 2014. > TABLE 106
Interest-rate sensitivity
TABLE 105
in € million
Other comprehensive income (loss)
Net income (loss)
+100 bps
– 100 bps
+100 bps
– 100 bps
2014
–
– 3.3
2014
–
3.3
2013
–
– 1.9
2013
–
1.9
Interest-rate swaps
in € million
Interest-rate swaps (assets)
Interest-rate swaps (liabilities)
Fair value
Notional amount
2014
2013
Hedge
Trading
Hedge
Trading
–
–
0.2
–
–
–
0.4
–
2014
–
–
11.0
–
TABLE 106
2013
–
–
13.0
–
We keep the world moving.KION GROUP AG | Annual Report 2014
212
[38] HEDGE ACCOUNTING
Hedging of interest-rate risk
Hedging currency risk
The KION Group did not have any material interest-rate deriva-
tives in 2014.
In the previous year, the KION Group funded itself by, among
other things, drawing down loans with variable interest rates in
In accordance with its treasury risk policy, the KION Group
various currencies. Interest-rate derivatives were used to hedge
applies cash flow hedge accounting in hedging the currency risks
the resultant interest-rate risk in 2013. These interest-rate deriva-
arising from highly probable future transactions and firm obliga-
tives were terminated in July 2013 when most of the floating-rate
tions not reported in the statement of financial position in various
loans were repaid. Upon early termination of the interest-rate
currencies. Foreign-currency forwards with settlement dates in
derivatives, the amounts totalling €14.4 million that were recog-
the same month as the expected cash flows from the Group’s
nised in OCI as part of cash flow hedge accounting were derecog-
operating activities are used as hedges.
nised and taken to income. The KION Group no longer had any
The effectiveness of the Group’s hedging transactions is
material interest-rate derivatives as at 31 December 2013.
assessed on the basis of forward rates using the hypothetical
derivative approach under the cumulative dollar-offset method.
The effective portion of the changes in the fair value of foreign -
currency forwards is recognised in accumulated other compre-
hensive income (loss) and only reversed when the corresponding
hedged item is recognised in income.
[39] SEGMENT REPORT
On account of the short-term nature of the Group’s payment
The Executive Board divides the KION Group into financial services
terms, reclassifications to the income statement and the recogni-
(FS) activities and the Linde Material Handling (LMH) and STILL
tion of the corresponding cash flows generally take place in the
brands for management purposes. Segment reporting follows
same reporting period. A foreign-currency receivable or liability is
the same breakdown, taking into account the relevant organisa-
recognised when goods are despatched or received. Until the
tional structures and corporate strategy of the KION Group.
corresponding payment is received, changes in the fair value of
the derivative are recognised in the income statement such that
they largely offset the effect of the measurement of the for-
Description of the segments
eign-currency receivable or liability at the reporting date.
The changes in fair value recognised and reclassified in other
The Linde Material Handling (LMH) segment encompasses the
comprehensive income in 2014 are shown in the consolidated
Linde, Fenwick and Baoli brands. The 30 per cent stake held in
statement of comprehensive income. There were no significant inef-
Linde Hydraulics is allocated to the LMH segment and accounted
fective portions in 2014, as had been the case in the previous year.
for using the equity method.
In total, foreign-currency cash flows of €248.7 million (2013:
The STILL segment comprises the STILL and OM STILL
€162.1 million) were hedged and designated as hedged items, of
brands.
which €184.0 million is expected by 30 September 2015 (2013:
FS activities include the financing of long-term leasing busi-
€147.6 million by 30 September 2014). The remaining cash flows
ness with external customers of the KION Group and short-term
designated as hedged items essentially fall due in the period up
rental business of the LMH and STILL operating segments as well
to 31 December 2015.
as risk management. When long-term leasing business is being
conducted, FS operates as a contractual partner to external cus-
tomers and provides the necessary funding in conjunction with
external financial partners. Besides management of residual -
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
213
Other disclosures
value risk, risk management also includes the management of
Assets and liabilities associated with the long-term leasing
credit risk. In addition, FS provides the financing for short-term
business, including related income and expenses, are assigned
rental fleets on behalf of the LMH and STILL brand segments,
to the FS segment.
which operate and maintain such fleets as part of their opera-
Whereas the main feature of long-term leasing business is
tional business.
the provision of a financial service for the external lessee, the
The Other segment comprises the subsidiary KION India as
focus in short-term rental business is on the service function.
well as holding companies and service companies in the KION
External customers are offered rental trucks from a rental pool –
Group. KION India manufactures diesel trucks, electric forklift
including associated services – for short-term use. Unlike the sit-
trucks and warehouse trucks under the Voltas brand. It has a net-
uation in long-term leasing, financial performance in the short-
work of more than 60 branches and dealers providing sales and
term business is largely dependent on the achieved level of
service. The service companies provide services for all segments
utilisation of the rental fleet, management of which lies entirely
in the KION Group. The bulk of the revenue in this segment is
within the responsibility of the brand segments. Given this struc-
generated by internal IT and logistics services.
ture, the assets associated with the short-term business remain
on the brand segments’ statements of financial position and the
related income and expenses remain on the brand segments’
Segment management
income statements.
In an indirect end customer finance arrangement, the other-
The KPIs used to manage the brand segments are order intake,
wise typical financing function of the FS segment as a lender for
revenue and adjusted EBIT. Segment reporting therefore includes
the leasing transaction no longer applies. As a result of the sale of
a reconciliation of externally reported consolidated earnings
the leased asset to the external finance provider in such transac-
before interest and tax (EBIT) – including KION acquisition items
tions, the brand segments view the transactions in the same way
and non-recurring items – to the adjusted EBIT for the segments
as a sale to an end-user. Consequently, these transactions and all
(‘adjusted EBIT’).
the revenue that they generate are recognised in the LMH and
Earnings before tax (EBT) and return on equity (ROE) are the
STILL brand segments.
KPIs used to manage the Financial Services segment. ROE is cal-
culated on the basis of average equity employed excluding net
income (loss) for the current period. As at 31 December 2014,
ROE – earnings before tax as a percentage of average equity –
remained unchanged on the prior year at 13.0 per cent.
Intra-group transactions are generally conducted on an
arm’s-length basis. The regular (interest) margin income that FS
generates from its business activities reflects prevailing market
conditions. Surpluses from leasing that exceed this interest mar-
gin are reflected in the producer margin within the operating profit
generated by the LMH and STILL brand segments.
Segment reports are prepared in accordance with the same
accounting policies as the consolidated financial statements, as
described in note [7]. Contrary to these policies, however, the
LMH and STILL brands’ intersegment sales to FS are always
treated as revenue for the brand segments, irrespective of which
entity might retain any opportunities and risks.
We keep the world moving.KION GROUP AG | Annual Report 2014 214
The following tables show information on the KION Group’s
operating segments for 2014 and 2013: > TABLES 107 – 108
Segment report 2014
TABLE 107
in € million
Revenue from external customers
Intersegment revenue
Total revenue
Earnings before taxes
Financial income
Financial expenses
= Net financial expenses
EBIT
+ Non-recurring items
+ KION acquisition items
= Adjusted EBIT
Segment assets
Segment liabilities
Carrying amount of at-equity
investments
Equity result
Capital expenditure ¹
Depreciation ²
Order intake
Number of employees ³
LMH
2,769.1
308.1
3,077.2
258.1
14.8
– 27.1
– 12.3
270.3
36.9
32.4
339.6
4,918.8
1,713.3
92.8
– 28.6
68.2
88.4
3,234.4
13,945
STILL
1,511.0
339.7
1,850.7
83.8
1.8
– 36.4
– 34.6
118.4
8.7
6.5
133.6
2,206.7
1,370.8
4.3
1.1
50.1
44.8
1,895.1
7,976
Financial
Services
350.1
270.7
620.9
5.2
58.8
– 55.6
3.1
2.1
0.0
0.0
2.1
1,361.3
1,314.8
17.5
2.7
0.0
0.0
622.7
60
Other
47.6
188.1
235.7
79.8
55.3
– 99.6
– 44.3
124.1
11.4
0.0
135.5
1,241.7
3,669.4
0.0
0.0
14.8
17.0
236.5
688
Consolidation /
Reconciliation
–
– 1,106.6
– 1,106.6
– 168.7
– 46.2
45.4
– 0.7
– 167.9
–
–
– 167.9
– 3,600.0
– 3,586.9
–
–
–
–
– 1,111.3
–
Total
4,677.9
–
4,677.9
258.3
84.4
– 173.2
– 88.8
347.0
57.0
38.9
442.9
6,128.5
4,481.4
114.6
– 24.8
133.1
150.3
4,877.3
22,669
1 Capital expenditure including capitalised R&D costs, excluding leased and rental assets
2 On intangible assets and property, plant and equipment excl. leased and rental assets
3 Number of employees in full-time equivalents as at 31 December
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
215
Other disclosures
Segment report 2013
TABLE 108
in € million
Revenue from external customers
Intersegment revenue
Total revenue
Earnings before taxes
Financial income
Financial expenses
= Net financial expenses
EBIT
+ Non-recurring items
+ KION acquisition items
= Adjusted EBIT
Segment assets
Segment liabilities
Carrying amount of at-equity
investments
Equity result
Capital expenditure ¹
Depreciation ²
Order intake
Number of employees ³
LMH
2,629.8
251.2
2,881.1
270.3
9.2
– 21.3
– 12.0
282.4
2.9
23.8
309.1
4,669.4
1,553.3
118.3
– 2.5
67.6
86.0
2,901.8
13,824
STILL
1,501.8
215.7
1,717.5
75.0
1.7
– 36.6
– 34.9
109.9
8.3
5.7
123.9
2,086.9
1,198.5
4.6
0.7
42.2
38.8
1,692.0
7,715
Financial
Services
314.7
224.7
539.4
4.7
52.4
– 48.4
4.0
0.7
0.0
0.0
0.7
1,249.4
1,207.7
15.8
3.5
0.0
0.0
539.4
59
Other
48.2
186.9
235.1
– 102.6
27.7
– 202.1
– 174.4
71.8
1.7
0.0
73.5
902.9
3,332.0
0.0
0.0
16.0
16.8
235.1
675
Consolidation /
Reconciliation
–
– 878.5
– 878.5
– 93.1
– 42.6
40.1
– 2.5
– 90.6
–
–
– 90.6
– 2,882.1
– 2,875.0
–
–
–
–
– 879.1
–
Total
4,494.6
–
4,494.6
154.3
48.5
– 268.4
– 219.8
374.2
12.8
29.5
416.5
6,026.4
4,416.5
138.6
1.7
125.8
141.4
4,489.1
22,273
1 Capital expenditure including capitalised R&D costs, excluding leased and rental assets
2 On intangible assets and property, plant and equipment excl. leased and rental assets
3 Number of employees in full-time equivalents as at 31 December
We keep the world moving.KION GROUP AG | Annual Report 2014 216
The table below gives a breakdown of the revenue from external
customers by location. > TABLE 109
Segment revenue broken down by customer location
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
TABLE 109
2013
3,223.9
369.7
279.4
453.5
168.1
2014
3,411.0
403.3
245.3
470.7
147.5
Total segment revenue
4,677.9
4,494.6
Revenue in Germany came to €1,221.8 million in 2014 (2013:
€473.0 million (31 December 2013: €449.1 million), which primar-
€1,114.5 million). There are no relationships with individual cus-
ily resulted from the funding of the short-term rental business of
tomers that generate revenue deemed to be significant as a pro-
LMH and STILL. The leased assets of the Financial Services seg-
portion of total consolidated revenue.
ment amounted to €267.4 million at the reporting date (31 Decem-
Financial income and expenses including all interest income
ber 2013: €240.7 million).
and expenses are described in notes [12] and [13].
The liabilities attributable to the Financial Services segment
The non-recurring items mainly comprise consultancy costs
largely comprised liabilities to leasing companies of €1,037.5 mil-
and expenses in connection with severance payments. They
lion (31 December 2013: €935.2 million) relating to sale-and-
totalled €57.0 million in 2014 (2013: €12.8 million). In 2014, these
leaseback transactions that resulted from the funding of long-
items also included components of the share of profit (loss) of the
term leases with external third parties and intra-group customers.
equity-accounted Linde Hydraulics and expenses in connection
In the reporting year, €702.9 million (2013: €615.5 million) of this
with the impairment charge recognised on the investment in
amount was attributable to the funding of leases with external
Linde Hydraulics totalling €28.2 million (2013: net income of
customers and €334.5 million (2013: €319.7 million) related to the
€0.1 million), which relate to the LMH segment.
funding of intra-group leases with the LMH and STILL brand
The KION acquisition items relate to the acquisition of the
companies as lessees, who had in turn entered into leases with
KION Group, which was formed at the end of 2006 when it was
external third parties. Moreover, they include net financial debt of
spun off from Linde AG, Munich. These items comprise net write-
€155.1 million (2013: €163.6 million) arising from general corpo-
downs and other expenses in relation to the hidden reserves
rate finance for the FS segment.
identified as part of the purchase price allocation.
The assets attributable to the Financial Services segment
include long-term leases, which were reported as either leased
assets or lease receivables, depending on the type of lease.
As at the reporting date, lease receivables due from unrelated
third parties amounted to €521.9 million (31 December 2013:
€458.1 million). There were also intra-group lease receivables of
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
217
Other disclosures
Capital expenditure by the Financial Services segment includes
Capital expenditure in Germany came to €88.2 million in 2014
additions to intangible assets and property, plant and equipment.
(2013: €82.2 million).
Leased assets are described in note [18]. > TABLE 110
Capital expenditure broken down by company location (excl. leased and rental assets)
TABLE 110
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
Total capital expenditure
2014
111.9
2.6
2.1
15.6
0.9
133.1
2013
105.0
3.7
2.2
13.9
0.9
125.8
Depreciation/amortisation relates to intangible assets with finite
Non-current assets attributable to Germany amounted to
useful lives and property, plant and equipment.
€2,618.7 million at 31 December 2014 (31 December 2013:
The regional breakdown of non-current assets excluding
€2,676.6 million).
financial assets, financial instruments, deferred tax assets and
post-employment benefits is as follows: > TABLE 111
Non-current assets broken down by company location
in € million
Western Europe
Eastern Europe
Americas
Asia
Rest of world
TABLE 111
2013
3,316.2
109.6
42.6
130.4
42.4
2014
3,303.7
112.5
51.5
156.9
48.2
Total non-current assets (IFRS 8)
3,672.7
3,641.2
We keep the world moving.KION GROUP AG | Annual Report 2014
218
[40] EMPLOYEES
The KION Group employed an average of 22,438 full-time equiv-
alents (including trainees and apprentices) in the reporting year
(2013: 21,632). The number of employees (including part-time
employees expressed in terms of full-time equivalents) is broken
down by region as follows: > TABLE 112
Employees (average)
Germany
France
UK
Italy
Rest of Europe
Asia
Rest of world
Total employees
TABLE 112
2013
7,625
3,160
1,881
786
3,565
3,438
1,177
2014
8,139
3,157
1,758
805
3,730
3,643
1,206
22,438
21,632
The KION Group employed an average of 536 trainees and
ence generally exists if an entity holds between 20 per cent and
apprentices in 2014 (2013: 506).
50 per cent of the shares in another entity.
[41] RELATED PARTY DISCLOSURES
The related parties that are solely or jointly controlled by the
KION Group or over which significant influence can be exercised
are included in the list of shareholdings as at 31 December 2014
(see note [45]). In addition, Weichai Power Co. Ltd., Weifang,
China, which indirectly holds 33.3 per cent of the shares in KION
GROUP AG and is also the largest single shareholder, Superlift
In addition to the subsidiaries included in the consolidated finan-
Holding S.à r.l., Luxembourg, which holds 18.8 per cent of the
cial statements, the KION Group has direct or indirect business
shares in KION GROUP AG, Kohlberg Kravis Roberts & Co L.P.,
relationships with a number of unconsolidated subsidiaries, joint
New York, USA, and Goldman, Sachs & Co., New York, USA, are
ventures and associates in the course of its ordinary business
also related parties.
activities. According to IAS 24, related parties include entities that
have control or significant influence over KION GROUP AG. An
entity is usually assumed to have control (parent) if it holds more
than 50 per cent of the shares in another entity. Significant influ-
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
219
Other disclosures
The revenue that the KION Group generated in 2014 and 2013
from selling goods and services to related parties, and vice versa,
is shown in > TABLES 113 – 114 along with the outstanding receiva-
bles and liabilities. No valuation allowances for trade receivables
had been recognised as at the reporting date, a situation that was
unchanged on 31 December 2013.
The members of the Executive Board and Supervisory Board
of KION GROUP AG are also related parties. Details of the remu-
neration of the Executive Board and Supervisory Board can be
found in note [43].
Related party disclosures 2014
in € million
Non-consolidated subsidiaries
Associates
Joint ventures
Other related parties *
Total
Receivables
Liabilities
Sales of goods
and services
8.3
8.9
1.1
4.4
22.7
4.9
2.2
45.1
0.9
53.1
9.4
115.8
63.9
15.3
204.5
* ‘Other related parties’ include, among others, transactions with Weichai and Superlift and their affiliated companies
Related party disclosures 2013
in € million
Non-consolidated subsidiaries
Associates
Joint ventures
Other related parties *
Total
Receivables
Liabilities
Sales of goods
and services
10.0
10.1
1.1
5.5
26.6
6.1
2.5
66.7
1.1
76.4
9.7
110.1
36.3
10.4
166.4
* ‘Other related parties’ include, among others, transactions with Weichai and Superlift and their affiliated companies
TABLE 113
Purchases
of goods and
services
11.1
111.2
52.9
13.5
188.7
TABLE 114
Purchases
of goods and
services
7.4
114.6
51.6
14.1
187.8
We keep the world moving.KION GROUP AG | Annual Report 2014
220
[42] VARIABLE REMUNERATION
The KEEP programme is a share matching plan. Participating
employees acquire KION shares for their own investment pur-
poses. Each set of three KION shares represents a block of
shares. Once the three-year holding period has expired, employ-
KEEP employee share option programme
ees are entitled to one free matching share (bonus share) for each
block. However, KION GROUP AG has the right to satisfy each
On 1 October 2014, the Executive Board of KION GROUP AG
programme participant’s entitlement by paying a cash settlement
decided to introduce an employee share option programme for
instead of granting a bonus share. For employees taking part for
employees in Germany and to issue an offer in connection with
the first time, the KION Group is offering a special incentive in the
this programme. The period during which eligible employees
form of starter blocks: the KION Group will bear the cost of one
could take up this offer by making a declaration of acceptance
KION share (free share) in each of the first twelve blocks of shares
ran from 2 to 31 October 2014. To be eligible to participate in the
that an employee takes up.
KION Employee Equity Programme (KEEP), employees must, at
The right to obtain a bonus share lapses if participants sell
the start of the offer phase, have had a permanent, uninterrupted
their own investment in KION shares or cease to work for the
employment contract with a participating KION Group company
KION Group. The change in the number of bonus shares to be
for at least one year. Currently, KION GROUP AG plus twelve
granted is shown in > TABLE 115.
German subsidiaries are taking part in KEEP. The Company is
considering whether to extend the employee share option
programme to subsidiaries in China, Brazil, France, the United
Kingdom, Italy, Spain, Poland and the Czech Republic over the
coming years.
Development of the granted bonus shares
in units
Balance as at 01/01/
Granted bonus shares
Forfeited bonus shares
Balance as at 31/12/
TABLE 115
2014
0
29,146
– 30
29,116
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
221
Other disclosures
Significant measurement parameters for the KION GROUP AG Share Matching Programme
TABLE 116
Measurement parameters
Expected dividend yield
Price of the KION share as at valuation date
Valuation date
31/12/2014
€0.88
€29.02
In 2014, 20,856 free shares were issued to employees as part of
parts on the total shareholder return (TSR) of KION GROUP AG
their starter blocks.
shares compared with the STOXX® Europe TMI Industrial Engi-
The free shares to be issued are measured at their fair value
neering index as a measure of market performance, and with
on the day on which employees obtain the right to acquire shares
return on capital employed (ROCE) as an internal measure. It also
as their own investment. The fair value on the grant date is deter-
depends on the performance of KION GROUP AG shares during
mined on the basis of Monte Carlo simulation. The measurement
the relevant period.
parameters used are shown in > TABLE 116.
The first performance period for the 2014 tranche ends on
For the 2014 programme, the fair value of a bonus share
31 December 2016. At the beginning of the performance period,
was €26.59.
the managers were granted a total of 0.2 million virtual shares for
The fair value of the bonus shares to be granted is recognised
this tranche based on a particular percentage of their individual
as an expense and paid into capital reserves over the three-year
gross annual remuneration at the time of grant. At the end of the
holding period.
performance period, the number of the virtual shares is amended
In 2014, an expense of €0.7 million was recognised under
depending on the degree to which the relevant targets are
functional costs for free shares and bonus shares in connection
achieved. The resulting final number of virtual shares multiplied by
with the employee share option programme (2013: €0.0 million).
the smoothed price of KION GROUP AG shares at the end of the
Each year, the Executive Board of KION GROUP AG decides
performance period determines the amount of cash actually paid.
whether there will be an offer made under the share option pro-
The KION Group has the right to adjust the amount payable at the
gramme that year and which companies will participate.
end of the performance period in the event of exceptional occur-
KION performance share plan
(PSP) for managers
rences or developments. The maximum amount payable is limited
to 200 per cent of the value of the shares allotted to an individual
at the grant date.
The pro-rata expense calculation based on the fair value of
the virtual shares on each valuation date is carried out using
In November 2014, the Company decided to introduce long-term,
Monte Carlo simulation. The measurement parameters shown
variable remuneration (the KION Long-Term Incentive Plan for Top
in > TABLE 117 were used to value the virtual shares on the
Management 2014) for managers in the KION Group so that the
reporting date.
remuneration structure would be based on the sustainable per-
formance of the Company. The plan was introduced retrospec-
tively from 1 January 2014.
Under this performance share plan, managers are granted
virtual shares over a defined period (three years). The remunera-
tion component measured over the long term is based in equal
We keep the world moving.KION GROUP AG | Annual Report 2014
222
Significant measurement parameters of the PSP for Executive Employees
Measurement parameters
Expected volatility of the KION share
Expected volatility of the STOXX® Europe TMI Industrial Engineering Index
Risk-free interest rate
Expected dividend yield
Price of the KION-Share as at 31/12/2014
Initial value of the KION share (60 days average)
Initial value of the STOXX® Europe TMI Industrial Engineering Index (60 days average)
TABLE 117
Value as at
31/12/2014
30.0%
15.0%
– 0.1%
€0.88
€31.74
€29.49
€208.87
The historic volatility of shares in similar companies (peer group)
The performance period for the 2014 tranche ends on
was used to determine the volatility of KION shares on which the
31 Decem ber 2016 (2013 tranche: 31 December 2015). At the
valuation is based. As at 31 December 2014, the fair value of one
beginning of the performance period on 1 January 2014 (2013
virtual share was €27.23 for the 2014 tranche and the total fair
tranche: 29 June 2013), the Executive Board members were
value based on 0.2 million virtual shares was €4.9 million on that
granted a total of 0.2 million virtual shares for this tranche (2013
date. Because the performance period for the 2014 tranche has
tranche: 0.3 million virtual shares) with a specific fair value based
been set at 36 months, a liability of €1.6 million was recognised as a
on an allocation value in euros specified in each Executive Board
pro-rata expense under functional costs for twelve months in 2014.
member’s service contract.
KION performance share plan (PSP)
for the Executive Board
At the end of the performance period, the number of the
virtual shares is amended depending on the degree to which the
relevant targets are achieved. The resulting final number of virtual
shares multiplied by the smoothed price of KION GROUP AG
shares at the end of the performance period determines the
As part of the KION GROUP AG performance share plan, the
amount of cash actually paid. The Supervisory Board can also
Executive Board members are allocated virtual shares over a fixed
use a discretionary personal performance factor to adjust the final
period (two-and-a-half years for the 2013 tranche and three years
payment at the end of the performance period by +/- 20 per cent.
for all subsequent tranches). The remuneration component meas-
The maximum amount payable is limited to 200 per cent of the
ured over the long term is based in equal parts on the total share-
value of the shares allotted to an individual at the grant date.
holder return (TSR) of KION GROUP AG shares compared with
The pro-rata expense calculation based on the fair value of
the STOXX® Europe TMI Industrial Engineering index as a meas-
the virtual shares on each valuation date is carried out using
ure of market performance, and with return on capital employed
Monte Carlo simulation. The measurement parameters shown
(ROCE) as an internal measure. It also depends on the perfor-
in > TABLE 118 were used to value the virtual shares on the
mance of KION GROUP AG shares during the relevant period.
reporting date.
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
223
Other disclosures
Significant measurement parameters for the KION GROUP AG Performance Share Plan
TABLE 118
Measurement parameters
Expected volatility of the KION share
Expected volatility of the STOXX® Europe TMI Industrial Engineering Index
Risk-free interest rate
Expected dividend yield
Price of the KION share
Initial value of the KION share (60 days average)
Valuation date 31/12/2014
Tranche 2014
Tranche 2013
30.0%
15.0%
– 0.1%
€0.88
€31.74
€29.49
25.0%
15.0%
– 0.1%
€0.88
€31.74
€26.64
Initial value of the STOXX® Europe TMI Industrial Engineering Index (60 days average)
€208.87
€204.26
The historic volatility of shares in similar companies (peer group)
was used to determine the volatility of KION shares on which the
valuation for the 2014 tranche is based. Taking account of the
remaining term of one year, the historic volatility of KION shares
was used to determine the volatility on which the valuation for the
2013 tranche is based. As at 31 December 2014, the fair value of
[43] REMUNERATION OF THE
EXECUTIVE BOARD AND
SUPERVISORY BOARD
one virtual share was €27.72 for the 2013 tranche (31 December
Executive Board
2013: €23.74) and €26.79 for the 2014 tranche. On that date, the
total fair value based on 0.3 million and 0.2 million virtual shares
Gordon Riske is Chief Executive Officer (CEO) and his responsi-
respectively was €7.3 million (2013 tranche; 31 December 2013:
bilities include strategy/business development, corporate com-
€6.2 million) and €5.2 million (2014 tranche). Because the perfor-
munications, the corporate office, internal audit, compliance,
mance period for the 2013 tranche has been set at 30 months, a
KION Warehouse Systems, KION synergies/platforms, the North
pro-rata expense of €3.1 million for twelve months was recog-
America region and the South America region. Since 15 Jan -
nised in 2014 (2013: €1.2 million). The total carrying amount for
uary 2015, he has also been CEO of both the Linde Material
liabilities in connection with share-based remuneration was
Handling GmbH and the STILL GmbH brand companies and has
€4.4 million (2013 tranche; 31 December 2013: €1.2 million). A lia-
assumed responsibility for quality.
bility of €1.7 million in respect of the 2014 tranche was recognised
Bert-Jan Knoef stepped down from the Executive Board of
as a pro-rata expense for twelve months in 2014.
KION GROUP AG on 15 January 2015. He was CEO and Labour
Relations Director of the brand company STILL GmbH. He over-
saw all cross-brand logistics activities and managed the intra-
group logistics service provider, Urban.
Theodor Maurer was CEO and Labour Relations Director of
the brand company Linde Material Handling GmbH until his
departure from the KION GROUP AG Executive Board on 15 Jan-
uary 2015. He was also responsible for quality, facility manage-
ment and health, safety & environment (HSE).
We keep the world moving.KION GROUP AG | Annual Report 2014
224
Ching Pong Quek is Chief Asia Pacific Officer and heads up the
is not required, nor of differences between variable remuneration
KION Group’s entire Asia business.
calculated on the basis of preliminary total target achievement
Dr Thomas Toepfer is Chief Financial Officer (CFO) and his
(benefits granted) and the one-year variable remuneration actually
responsibilities include accounting, tax & financial services, cor-
paid in the next year on the basis of the individual performance of
porate finance/investor relations/M&A, controlling, HR (Labour
each Executive Board member, which amounted to an expense
Relations Director), legal affairs, IT, purchasing and data protec-
of €0.3 million (allocation). On this basis, the total remuneration of
tion. On 15 January 2015, he also assumed responsibility for facil-
the members of the Executive Board pursuant to section 314 HGB
ity management/HSE and logistics/Urban.
came to €10.9 million (2013: €11.1 million).
The remuneration paid to the Executive Board comprises a
As in the previous year, no loans or advances were made to
fixed salary and non-cash benefits, pension entitlements and
members of the Executive Board in 2014. The present value of the
performance-related components. The variable performance-
defined benefit obligation in respect of Executive Board members
related components are paid each year on the basis of the
as at 31 December 2014 was €8.1 million (31 December 2013:
Group’s performance. In addition, there are performance-related
€5.9 million).
components in the form of the KION performance share plan for
The total remuneration paid to former members of the Exec-
all Executive Board members and a bonus for Dr Thomas Toep-
utive Board in 2014 amounted to €0.2 million (2013: €0.2 million).
fer. The pension entitlements consist of retirement, invalidity and
Defined benefit obligations to former members of the Executive
surviving dependants’ benefits.
Board or their surviving dependants amounting to €6.1 million
An expense of €21.0 million was recognised for the total
(2013: €5.2 million) were recognised in accordance with IAS 19.
remuneration for members of the Executive Board in 2014 (2013:
Further details of Executive Board remuneration, including
€7.4 million). This consisted of short-term remuneration amount-
the individual amounts for each member, can be found in the
ing to €5.7 million (2013: €4.9 million), post-employment benefits
remuneration report on pages 58 to 69 of this annual report.
totalling €0.9 million (2013: €0.6 million), termination benefits of
€8.8 million (2013: €0.0 million) and share-based payments of
€5.6 million (2013: €1.9 million). The short-term remuneration
Supervisory Board
comprised non-performance-related components amounting to
€3.0 million (2013: €2.8 million) and performance-related compo-
The total remuneration paid to the members of the Supervisory
nents amounting to €2.7 million (2013: €2.2 million). The current
Board for the performance of their tasks at the parent company
service cost resulting from pension provisions for the Executive
and subsidiaries in 2014 amounted to €1.2 million (2013: €0.8 mil-
Board is reported under post-employment benefits. The long-
lion). There were no loans or advances to members of the Supervi-
term incentive components take the form of a performance share
sory Board in 2014. Furthermore, the members of the Supervisory
plan (see note [42]). In addition, one Executive Board member
Board did not receive any remuneration or benefits for services
was promised a special bonus, to be paid in two tranches, that
provided as individuals, such as consulting or brokerage activities.
would be awarded in the event of a successful IPO; this bonus
Members of the Supervisory Board also received short-term
also counts as a long-term incentive.
employee benefits of €0.7 million for employee services (2013:
Under section 314 HGB, disclosure of the expense for share-
€0.6 million).
based payments is not required. Rather, they must be included in
the Executive Board members’ remuneration for the year in which
they are paid on the basis of the fair value at the individual grant
dates. The fair value of the share-based payments at their individ-
ual grant dates amounted to €5.6 million (2013: €6.2 million). Fur-
thermore, disclosure of post-employment benefits (expense of
€0.9 million) and of termination benefits (expense of €8.8 million)
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
225
Other disclosures
[44] MEMBERS OF THE EXECUTIVE
BOARD AND SUPERVISORY
BOARD
Bert-Jan Knoef
Member of the Executive Board / CEO of STILL
(until 14 January 2015)
Executive Board
Gordon Riske
Chief Executive Officer (CEO)
Member of the Executive Board of KION Material
Handling GmbH, Wiesbaden
Chief Executive Officer (CEO) and Labour Relations Director
of STILL GmbH, Hamburg
Presidente of the Consiglio di Amministrazione of OM Carrelli
Elevatori S.p.A., Lainate, Italy
Presidente of the Consiglio di Amministrazione of
Chief Executive Officer of KION Material
STILL ITALIA S.p.A., Lainate, Italy
Handling GmbH, Wiesbaden
Member of the Executive Board of KION Holding 2 GmbH,
Theodor Maurer
Wiesbaden
Member of the Executive Board / CEO of LMH
Member of the Asia Pacific Committee of KION Material
(until 14 January 2015)
Handling GmbH, Wiesbaden
Chairman of the Supervisory Board of Linde Material
Member of the Executive Board of KION Material
Handling GmbH, Aschaffenburg (until 14 January 2015)
Handling GmbH, Wiesbaden
Chief Executive Officer of Linde Material Handling GmbH,
Chief Executive Officer (CEO) and Labour Relations Director of
Aschaffenburg (since 15 January 2015)
Linde Material Handling GmbH, Aschaffenburg
Chairman of the Board of Directors of Linde (China)
Chairman of the Board of Directors of Linde Material
Forklift Truck Co., Ltd., Xiamen, People’s Republic of China
Handling (UK) Ltd., Basingstoke, United Kingdom
Chairman of the Supervisory Board of STILL GmbH, Hamburg
Chairman of the Board of Directors of Linde Heavy Truck
(until 14 January 2015)
Division Ltd., Merthyr Tydfil, United Kingdom
Chief Executive Officer of STILL GmbH, Hamburg
Member of the Board of Directors of LMH North America Corp.,
(since 15 January 2015)
Summerville, USA
Member of the Executive Board of the non-profit Hertie
Member of the Board of Directors of Linde (China) Forklift
Foundation, Frankfurt am Main
Truck Co. Ltd., Xiamen, People’s Republic of China
Non-Executive Director of Weichai Power Co., Ltd.,
Member of the Supervisory Board of Linde Hydraulics
Weifang, People’s Republic of China
Verwaltungs GmbH, Aschaffenburg (until 30 October 2014)
Member of the Comité Consultatif of Fenwick-Linde S.à r.l.,
Elancourt, France
Member of the Supervisory Board of Schöler Fördertechnik AG,
Rheinfelden
We keep the world moving.KION GROUP AG | Annual Report 2014 226
Ching Pong Quek
Member of the Executive Board of MPP Verwaltungs GmbH,
Member of the Executive Board / Chief Asia Pacific Officer
Wiesbaden
Member of the Executive Board of MPP Beteiligungs GmbH,
Member of the Executive Board / Chief Asia Pacific Officer
Wiesbaden
of KION Material Handling GmbH, Wiesbaden
Administrador Solidario of Islavista Spain S.A., Barcelona, Spain
Member of the Asia Pacific Committee of KION Material
Chairman of the Board of Directors of LMH North
Handling GmbH, Wiesbaden
America Corp., Summerville, USA
Chief Executive Officer of Linde (China) Forklift Truck Corp., Ltd.,
Member of the Board of Directors of Superlift UK Ltd.,
Xiamen, People’s Republic of China
Basingstoke, United Kingdom
Member of the Board of KION South Asia Pte Ltd., Singapore,
Singapore
President and CEO of KION Asia Ltd., Hong Kong,
Supervisory Board
People’s Republic of China
Chairman of KION Baoli Forklift Co., Ltd., Jiangsu,
Dr John Feldmann
People’s Republic of China
Chairman of the Supervisory Board
Member of the Board of Directors of KION India Pvte. Ltd.,
Pune, India
Former member of the Board of Executive Directors of BASF SE,
Member of the Board of Directors of Linde Material
Ludwigshafen
Handling Asia Pacific Pte., Ltd., Singapore, Singapore
Chairman of the Supervisory Board of KION Material
Chairman of the Board of Directors of Linde Material
Handling GmbH, Wiesbaden (until 25 April 2014)
Handling Hong Kong Ltd., Hong Kong, People’s Republic of
Member of the Supervisory Board of Bilfinger SE, Mannheim
China
Member of the Supervisory Board of Hornbach Baumarkt AG,
Dr Thomas Toepfer
Member of the Supervisory Board of Hornbach Holding AG,
Bornheim
Member of the Executive Board / CFO and Labour Relations
Bornheim
Director
Joachim Hartig 1
Member of the Executive Board of KION Material
Deputy Chairman of the Supervisory Board
Handling GmbH, Wiesbaden
Member of the Executive Board of KION Holding 2 GmbH,
Head of Learning and Development at Linde Material Handling
Wiesbaden
GmbH, Aschaffenburg
Member of the Asia Pacific Committee of KION Material
Deputy Chairman of the Supervisory Board of
Handling GmbH, Wiesbaden
KION Material Handling GmbH, Wiesbaden (until 25 April 2014)
Member of the Supervisory Board of STILL GmbH, Hamburg
Deputy Chairman of the Supervisory Board of
(until 14 January 2015)
Linde Material Handling GmbH, Aschaffenburg
Chairman of the Supervisory Board of STILL GmbH, Hamburg
(since 15 January 2015)
Birgit A. Behrendt (since 1 January 2015)
Member of the Supervisory Board of Linde Material Handling
Vice President, Global Programs and Purchasing Operations at
GmbH, Aschaffenburg (until 14 January 2015)
the Ford Motor Company, Dearborn, Michigan, USA
Chairman of the Supervisory Board of Linde Material Handling
GmbH (since 15 January 2015)
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
227
Other disclosures
Holger Brandt 2
Member of the Supervisory Board of LEG Immobilien AG,
Head of Sales Germany at STILL GmbH, Hamburg
Düsseldorf (until 2 April 2014)
Member of the Supervisory Board of KION Material
Member of the Executive Board of Xella International
Handling GmbH, Wiesbaden (until 25 April 2014)
Holdings S.à r.l., Luxembourg
Member of the Supervisory Board of STILL GmbH, Hamburg
Member of the Executive Board of Xella HoldCo
Dr Alexander Dibelius
Member of the Executive Board of Xella Topco S.à r.l.,
Chairman of the Executive Board of Goldman Sachs AG,
Luxembourg
Frankfurt am Main
Member of the Executive Board of Xenia S.à r.l.,
Finance S.A., Luxembourg
Member of the Supervisory Board of KION Material
Luxembourg
Handling GmbH, Wiesbaden (until 25 April 2014)
Member of the European Management Committee of Goldman
Johannes P. Huth
Sachs International, London, United Kingdom
Partner at and member of the Executive Committee of Kohlberg
Member of the Board of Directors of OOO Goldman Sachs,
Kravis Roberts & Co. Partners LLP, London, United Kingdom
Moscow, Russia
Member of the Supervisory Board of KION Material
Member of the Board of Directors of OOO Goldman Sachs
Handling GmbH, Wiesbaden (until 25 April 2014)
Bank, Moscow, Russia
Chairman of the Supervisory Board of Finedining Capital AG,
Member of the Shareholder Committee of Xella
Munich (since 2 October 2014)
International S.à r.l., Luxembourg
Member of the Supervisory Board of German Estate Group AG
Chairman of the Supervisory Board of Wincor Nixdorf AG,
(GEG), Frankfurt am Main (since 21 January 2015)
Paderborn
Member of the Supervisory Board of Hertha BSC GmbH & Co.
Member of the Supervisory Board of Wincor Nixdorf
KGaA, Berlin (since 4 February 2014)
International GmbH, Paderborn
Deputy Chairman of the Supervisory Board of NXP BV,
Denis Heljic 1
Chairman of the Supervisory Board of ProSiebenSat. 1
Spokesperson for the STILL branches, Field Technician at STILL
Media AG, Unterföhring (until 26 June 2014)
GmbH, Dortmund, and
Chairman of the Supervisory Board of WMF AG,
Deputy Chairman of the Works Council of STILL GmbH,
Geislingen an der Steige
Eindhoven, Netherlands
Dortmund plant
Member of the Supervisory Board of KION Material Handling
Jiang Kui
GmbH, Wiesbaden (until 25 April 2014)
President and Director of Shandong Heavy Industry
Group Co., Ltd., Jinan, People’s Republic of China
Dr Martin Hintze (until 31 December 2014)
Member of the Supervisory Board of KION Material
Managing Director of Merchant Banking at
Handling GmbH, Wiesbaden (until 25 April 2014)
Goldman Sachs International, London, United Kingdom
Chairman of the Asia Pacific Committee of KION Material
Member of the Supervisory Board of KION Material
Handling GmbH, Wiesbaden *
Handling GmbH, Wiesbaden (until 25 April 2014)
Director of Shantui Construction Machinery Co., Ltd.,
Non-Executive Director of Ceona Holding Ltd., Guernsey
Jining, People’s Republic of China
Member of the Board of Directors of DONG Energy A/S,
Chairman of the Board of Strong Construction
Fredericia, Denmark
Machinery Co., Ltd., Linyi, People’s Republic of China
Managing Director of New Energy Investment S.à r.l.,
Deputy Chairman of the Board of Weichai
Luxembourg (until 17 December 2014)
Holding Group Co., Ltd., Weifang, People’s Republic of China
We keep the world moving.KION GROUP AG | Annual Report 2014 228
Director of Weichai Power Co., Ltd., Weifang,
Hans Peter Ring
People’s Republic of China
Management Consultant, Munich
Director of Shandong Heavy Industry India
Member of the Supervisory Board of KION Material Handling
Private Ltd., Pune, India
GmbH, Wiesbaden (until 25 April 2014)
Director of Weichai Power Hong Kong International
Member of the Supervisory Board of Airbus Defense und Space
Development Co., Ltd., Hong Kong, People’s Republic of China
GmbH, Ottobrunn (since 15 October 2014)
Member of the Executive Board of Hydraulics Drive
Member of the Supervisory Board of Elbe Flugzeugwerke
Technology Beteiligungs GmbH, Aschaffenburg
GmbH, Dresden
Member of the Supervisory Board of Linde Hydraulics
Member of the Supervisory Board of MAG IAS GmbH,
Verwaltungs GmbH, Aschaffenburg
Göppingen
Member of the Supervisory Board of Fokker Technologies
Olaf Kunz 1 (since 1 September 2014)
Holding B.V., Papendrecht, Netherlands
District Secretary/Lawyer at IG Metall, District Office for the
Coast, Hamburg
Alexandra Schädler 1
Member of the Supervisory Board of STILL GmbH, Hamburg
Trade Union Secretary on the National Executive of IG Metall,
Frankfurt am Main
Thilo Kämmerer 1 (until 31 August 2014)
Member of the Supervisory Board of KION Material Handling
Trade Union Secretary, IG Metall, Administrative Office,
GmbH, Wiesbaden (until 25 April 2014)
Bamberg
Member of the Supervisory Board of Fujitsu Technology
Member of the Supervisory Board of KION Material
Solutions GmbH, Munich
Handling GmbH, Wiesbaden (until 25 April 2014)
Özcan Pancarci 1
Silke Scheiber (until 31 December 2014)
Partner at Kohlberg Kravis Roberts & Co. Partners LLP,
Chairman of the Plants I & II Works Council of Linde Material
London, United Kingdom
Handling GmbH, Aschaffenburg
Member of the Supervisory Board of KION Material Handling
Chairman of the European Works Council of the KION Group
GmbH, Wiesbaden (until 25 April 2014)
Member of the Supervisory Board of KION Material Handling
Member of the Supervisory Board of Finedining Capital AG,
GmbH, Wiesbaden (until 25 April 2014)
Munich (since 2 October 2014)
Member of the Supervisory Board of Linde Material Handling
Member of the Board of Directors of Jungbunzlauer Holding AG,
GmbH, Aschaffenburg
Basel, Switzerland
Member of the Supervisory Board of WMF AG, Geislingen an
Kay Pietsch 1
der Steige
Chairman of the Group Works Council of the KION Group
Member of the Supervisory Board of Van Gansewinkel Groep B.V.,
(until 22 January 2015)
Rotterdam, Netherlands
Member of the Supervisory Board of KION Material Handling
GmbH, Wiesbaden (until 25 April 2014)
Tan Xuguang
Deputy Chairman of the Supervisory Board of STILL GmbH,
Chief Executive Officer and Chairman of the Board of Directors
Hamburg
of Weichai Power Co. Ltd., Weifang, People’s Republic of China
Member of the Supervisory Board of KION Material Handling
GmbH, Wiesbaden (until 25 April 2014)
Chairman of the Board of Directors of Shandong Heavy Industry
Group Co., Ltd., Jinan, People’s Republic of China
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
229
Other disclosures
Chairman of the Board of Directors of Weichai Group Holding
Co., Ltd., Weifang, People’s Republic of China
Chairman of the Board of Directors of Weichai Heavy Machinery
Co., Ltd., Weifang, People’s Republic of China
Chairman of the Board of Directors of Shaanxi Heavy-duty
Motor Co., Ltd., Xi’an, People’s Republic of China
Chairman of the Board of Directors of Shaanxi Fast Gear Co.,
Ltd., Xi’an, People’s Republic of China
Hans-Peter Weiß 1
Chairman of the Plant III Works Council of Linde Material
Handling GmbH, Kahl
Member of the Supervisory Board of KION Material Handling
GmbH, Wiesbaden (until 25 April 2014)
Xu Ping (since 1 January 2015)
Partner at King & Wood Mallesons, Beijing, People’s Republic of
China
Member of the Board of Directors of Ferretti S.p.A., Cattolica,
Italy
Member of the Management Committee at King & Wood
Mallesons, Beijing, People’s Republic of China
1 Employee representatives
2 Executive representatives
* Not a committee or governing body of the KION GROUP AG required by law
We keep the world moving.KION GROUP AG | Annual Report 2014
230
[45] LIST OF THE SHAREHOLDINGS OF
KION GROUP AG, WIESBADEN
The shareholdings of the KION Group as at 31 December 2014
are listed below. > TABLE 119
List of shareholdings as of 31 December, 2014 (continued)
TABLE 119
No. Name
Registered
office
Country
Parent
company
Share-
holding
2014
Share-
holding
2013
Note
1 KION GROUP AG
Wiesbaden
Germany
Consolidated subsidiaries
Domestic
2 BlackForxx GmbH
3 Eisenwerk Weilbach GmbH
4 Fahrzeugbau GmbH Geisa
5 KION Financial Services GmbH
6 KION Holding 2 GmbH
Stuhr
Wiesbaden
Geisa
Wiesbaden
Wiesbaden
7 KION Information Management Services GmbH Wiesbaden
8 KION Material Handling GmbH
9 KION Warehouse Systems GmbH
Wiesbaden
Reutlingen
10 Klaus Pahlke GmbH & Co. Fördertechnik KG
Haan
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
11 Linde Material Handling GmbH
Aschaffenburg
Germany
18
11
18
11
1
8
6
18
11
8
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
12 LMH Immobilien GmbH & Co. KG
Aschaffenburg
Germany
11 & 13
99.64%
99.64%
13 LMH Immobilien Holding GmbH & Co. KG
Aschaffenburg
Germany
14 LMH Immobilien Holding Verwaltungs-GmbH
Aschaffenburg
Germany
15 LMH Immobilien Verwaltungs-GmbH
Aschaffenburg
Germany
16 Schrader Industriefahrzeuge GmbH & Co. KG
Essen
17 STILL Financial Services GmbH
Hamburg
18 STILL Gesellschaft mit beschränkter Haftung
Hamburg
Germany
Germany
Germany
19 Urban-Transporte Gesellschaft mit beschränkter
Unterschleißheim Germany
Haftung
20 Willenbrock Fördertechnik GmbH & Co. KG
Hannover
21 Willenbrock Fördertechnik GmbH & Co. KG
Bremen
22 Willenbrock Fördertechnik Holding GmbH
Bremen
Germany
Germany
Germany
11
11
11
11
5
11
11
22
22
11
94.00%
94.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
74.00%
74.00%
74.00%
74.00%
74.00%
74.00%
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
231
Other disclosures
List of shareholdings as of 31 December, 2014 (continued)
TABLE 119
No. Name
Foreign
Registered
office
Country
Parent
company
Share-
holding
2014
Share-
holding
2013
Note
23 Linde Material Handling Pty. Ltd.
Huntingwood
Australia
11
100.00% 100.00%
24 STILL N.V.
25 KION South America Fabricação de Equipa-
mentos para Armazenagem Ltda.
Wijnegem
Indaiatuba / São
Paulo
Belgium
Brazil
26 KION Baoli (Jiangsu) Forklift Co., Ltd.
Jiangjiang
27 Linde (China) Forklift Truck Corporation Ltd.
28 STILL DANMARK A/S
29 BARTHELEMY MANUTENTION SAS
30 Bastide Manutention SAS
31 Bretagne Manutention S.A.
32 FENWICK FINANCIAL SERVICES SAS
33 FENWICK-LINDE S.A.R.L.
34 KION France SERVICES SAS
Xiamen
Kolding
Vitrolles
Toulouse
Pacé
Elancourt
Elancourt
Elancourt
China
China
Denmark
France
France
France
France
France
France
35 LOIRE OCEAN MANUTENTION SAS
Saint-Herblain
France
38 Société Angoumoisine de Manutention
Champniers
36 Manuchar S.A.
37 MANUSOM SAS
(SAMA) SAS
39 SM Rental SAS
40 STILL Location Services SAS
41 STILL SAS
42 KION FINANCIAL SERVICES Ltd.
43 Linde Castle Ltd.
44 Linde Creighton Ltd.
45 Linde Holdings Ltd.
46 Linde Jewsbury’s Ltd.
47 Linde Material Handling (UK) Ltd.
48 Linde Material Handling East Ltd.
49 Linde Material Handling Scotland Ltd.
50 Linde Material Handling South East Ltd.
51 Linde Severnside Ltd.
52 Linde Sterling Ltd.
53 McLEMAN FORK LIFT SERVICES LTD.
Gond Pontouvre France
Rivery
France
France
France
Roissy Charles
de Gaulle
Marne la Vallée
France
Marne la Vallée
France
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
18 & 66
100.00% 100.00%
18
100.00% 100.00%
56
11
18
33
33
33
34
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
87.00%
87.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
34 & 11
100.00% 100.00%
11
33
33
41
41
100.00% 100.00%
83.43%
86.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
33
100.00% 100.00%
34
34
55
47
47
55
47
45
47
47
47
47
47
44
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
We keep the world moving.KION GROUP AG | Annual Report 2014 232
List of shareholdings as of 31 December, 2014 (continued)
TABLE 119
No. Name
54 STILL Materials Handling Ltd.
55 Superlift UK Ltd.
Registered
office
Exeter
Basingstoke
Country
U.K.
U.K.
56 KION ASIA (HONG KONG) Ltd.
Kwai Chung
Hong Kong
57 Linde Material Handling Hong Kong Ltd.
Kwai Chung
Hong Kong
58 KION India Pvt. Ltd. (formerly: Voltas Material
Pune
India
Handling Pvt. Ltd.)
Parent
company
Share-
holding
2014
Share-
holding
2013
Note
55
11
11
11
80
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
59 Linde Material Handling (Ireland) Ltd.
Walkinstown
Ireland
45
100.00% 100.00%
60 KION Rental Services S.p.A.
Milan
61 Linde Material Handling Italia S.p.A.
Buguggiate
62 OM Carrelli Elevatori S.p.A.
63 QUALIFT S.p.A.
64 STILL ITALIA S.p.A.
65 KION Finance S.A.
66 STILL Intern Transport B.V.
67 AUSTRO OM PIMESPO Fördertechnik GmbH
68 Linde Fördertechnik GmbH
Lainate
Verona
Lainate
Hendrik Ido
Ambacht
Linz
Linz
Italy
Italy
Italy
Italy
Italy
Luxembourg
Luxembourg
Netherlands
61 & 62 & 64
100.00% 100.00%
11
100.00% 100.00%
11 & 64
100.00% 100.00%
61
18
–
18
100.00% 100.00%
100.00% 100.00%
–
–
[2]
100.00% 100.00%
Austria
Austria
62
100.00% 100.00%
11 & 67
100.00% 100.00%
69 STILL Gesellschaft m.b.H.
Wiener Neudorf
Austria
70 Linde Material Handling Polska Sp. z o.o.
71 STILL POLSKA Sp. z o.o.
72 OOO ‘Linde Material Handling Rus’
73 OOO ‘STILL Forklifttrucks’
74 STILL MOTOSTIVUITOARE S.R.L.
75 Linde Material Handling AB
76 STILL Sverige AB
77 Linde Material Handling Schweiz AG
78 STILL AG
79 KION South Asia Pte. Ltd.
80 Linde Material Handling Asia Pacific
Pte. Ltd.
Warsaw
Gadki
Moscow
Moscow
Giurgiu
Örebro
Malmö
Dietlikon
Otelfingen
Singapore
Singapore
Poland
Poland
Russia
Russia
Romania
Sweden
Sweden
Switzerland
Switzerland
Singapore
Singapore
18
11
18
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
11 & 3
100.00% 100.00%
11 & 18
100.00% 100.00%
11 & 18
100.00% 100.00%
11
18
11
18
11
11
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
81 Linde Material Handling Slovenská
Trenčin
Slovakia
11 & 91
100.00% 100.00%
republika s.r.o.
82 STILL SR, spol. s r.o.
83 Linde Viličar d.o.o.
84 IBER-MICAR S.L.
Nitra
Celje
Gavà
Slovakia
Slovenia
Spain
18 & 93
100.00% 100.00%
11
11
100.00% 100.00%
100.00% 100.00%
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
233
Other disclosures
List of shareholdings as of 31 December, 2014 (continued)
TABLE 119
No. Name
85 Islavista Spain S.A.U.
86 KION Rental Services S.A.U.
87 Linde Holding de Inversiones, S.R.L.
88 Linde Material Handling Ibérica, S.A.U.
89 STILL, S.A.U.
Registered
office
L’Hospitalet de
Llobregat
Barcelona
Pallejá
Pallejá
L’Hospitalet de
Llobregat
Country
Spain
Spain
Spain
Spain
Spain
Parent
company
Share-
holding
2014
Share-
holding
2013
Note
11
100.00% 100.00%
85
85
87
85
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
90 Linde Material Handling (Pty) Ltd.
Linbro Park
South Africa
11
100.00% 100.00%
91 Linde Material Handling Česká republika s r.o.
Prague
92 Linde Pohony s r.o.
Český Krumlov
93 STILL ČR spol. s r.o.
Prague
94 STILL ARSER Iş Makineleri Servis ve Ticaret
Izmir
A.Ş.
Czech
Republic
Czech
Republic
Czech
Republic
Turkey
95 Linde Magyarország Anyagmozgatási Kft.
Dunaharaszti
Hungary
96 STILL Kft.
97 KION North America Corp. (formerly: Linde
Material Handling North America Corp.)
Környe
Hungary
Summerville
United States
11 & 18
100.00% 100.00%
11
100.00% 100.00%
11 & 18
100.00% 100.00%
18
51.00%
51.00%
11
18
11
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
Non-consolidated subsidiaries (at amortised cost)
Domestic
98 Klaus Pahlke Betriebsführungs-GmbH
Haan
99 OM Deutschland GmbH
Neuhausen a. d.
Fildern
Germany
Germany
100 proplan Transport- und Lagersysteme GmbH
Aschaffenburg
Germany
101 Schrader Industriefahrzeuge Verwaltung GmbH Essen
102 Trainingscenter für Sicherheit und Transport
Bremen
GmbH
103 Willenbrock Fördertechnik Beteiligungs-GmbH Hannover
104 Willenbrock Fördertechnik Beteiligungs-GmbH Bremen
Germany
Germany
Germany
Germany
Foreign
11
62
1
11
22
22
22
100.00% 100.00%
100.00% 100.00%
[R]
100.00% 100.00%
100.00% 100.00%
74.00%
74.00%
74.00%
74.00%
74.00%
74.00%
105 Lansing Bagnall (Aust.) Pty. Ltd.
Huntingwood
Australia
47 & 11
100.00% 100.00%
[R]
106 WHO Real Estate OÜ
Tallinn
Estonia
22
74.00%
74.00%
We keep the world moving.KION GROUP AG | Annual Report 2014 234
List of shareholdings as of 31 December, 2014 (continued)
TABLE 119
No. Name
107 Baoli France SAS
Registered
office
Elancourt
Country
France
108 OM PIMESPO FRANCE S.A.S.
Marne la Vallée
France
109 SCI Champ Lagarde
110 URBAN LOGISTIQUE SAS
111 Castle Lift Trucks Ltd.
112 Creighton Materials Handling Ltd.
113 D.B.S. Brand Factors Ltd.
114 Fork Truck Rentals Ltd.
115 Fork Truck Training Ltd.
116 Lancashire (Fork Truck) Services Ltd.
117 Linde Heavy Truck Division Ltd.
118 OM PIMESPO (UK) Ltd.
Elancourt
Elancourt
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
Basingstoke
119 Stephensons Enterprise Fork Trucks Ltd.
Basingstoke
120 Sterling Mechanical Handling Ltd.
121 Trifik Services Ltd.
122 Urban Logistics (UK) Ltd.
Basingstoke
Basingstoke
Basingstoke
France
France
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
U.K.
123 Handling & Storage Equipment (Ireland) Ltd.
Walkinstown
Ireland
124 Carest SRL
125 COMMERCIALE CARRELLI S.r.l.
126 Milano Carrelli Elevatori S.r.l.
127 URBAN LOGISTICA S.R.L.
128 WHO Real Estate UAB
129 TOO ‘Linde Material Handling Kazakhstan’
Lainate
Lainate
Monza
Lainate
Vilnius
Almaty
Italy
Italy
Italy
Italy
Lithuania
Parent
company
34
62
33
19
47
47
52
47
47
52
47
62
52
47
47
19
59
62
Share-
holding
2014
Share-
holding
2013
100.00% 100.00%
Note
100.00% 100.00%
[R]
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
[R]
64 & 60
100.00% 100.00%
62
19
22
100.00% 100.00%
[R]
100.00% 100.00%
74.00%
74.00%
Kazakhstan
11 & 3
100.00% 100.00%
130 Linde Material Handling (Malaysia) Sdn. Bhd.
Shah Alam
Malaysia
131 Linde Viljuškari d.o.o.
Vrčin
132 Linde Material Handling (Thailand) Co., Ltd.
Bangkok
133 Baoli Material Handling Europe s.r.o.
Prague
134 Použitý Vozik CZ, s.r.o. (formerly: Baoli Material
Prague
Handling Česká republika s r.o.)
Serbia
Thailand
Czech
Republic
Czech
Republic
80
68
80
26
100.00% 100.00%
100.00% 100.00%
100.00% 100.00%
100.00%
–
[1]
91
100.00% 100.00%
135 Urban Transporte spol. s.r.o.
Moravany u Brna Czech
19
100.00% 100.00%
136 TOV ‘Linde Material Handling Ukraine’
Kiev
Republic
Ukraine
11 & 3
100.00% 100.00%
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
235
Other disclosures
List of shareholdings as of 31 December, 2014 (continued)
TABLE 119
Registered
office
Country
Parent
company
Share-
holding
2014
Share-
holding
2013
Note
No. Name
Associates (at-equity investments)
Domestic
137 Beutlhauser-Bassewitz GmbH & Co. KG
Hagelstadt
138 Hans Joachim Jetschke Indus-
triefahrzeuge (GmbH & Co.) KG
Hamburg
Germany
Germany
139 Linde Hydraulics GmbH & Co. KG
Aschaffenburg
Germany
140 Pelzer Fördertechnik GmbH
Kerpen
Germany
Foreign
141 Linde High Lift Chile S.A.
142 Labrosse Equipement S.A.
143 Normandie Manutention S.A.
Joint Ventures (at-equity investments)
Domestic
Santiago de Chile Chile
Saint-Péray
France
Le Grand Quevilly France
11
11
11
11
11
33
33
25.00%
25.00%
21.00%
21.00%
30.00%
30.00%
24.96%
24.96%
45.00%
45.00%
34.00%
34.00%
34.00%
34.00%
144 Linde Leasing GmbH
Wiesbaden
Germany
11
45.00%
45.00%
Foreign
145 JULI Motorenwerk s.r.o.
Moravany u Brna Czech
11 & 18
50.00%
50.00%
Republic
Joint Ventures (at amortised cost)
Domestic
146 Eisengießerei Dinklage GmbH
Dinklage
Germany
18
50.00%
50.00%
Associates (at amortised cost)
Domestic
147 JETSCHKE GmbH
Hamburg
Germany
148 Linde Hydraulics Verwaltungs GmbH
Aschaffenburg
Germany
149 MV Fördertechnik GmbH
Blankenhain
Germany
150 Supralift Beteiligungs- und Kommunikations-
gesellschaft mbH
Hofheim am
Taunus
Germany
11
11
11
11
21.00%
22.00%
30.00%
30.00%
25.00%
25.00%
50.00%
50.00%
We keep the world moving.KION GROUP AG | Annual Report 2014 236
List of shareholdings as of 31 December, 2014 (continued)
TABLE 119
No. Name
151 Supralift GmbH & Co. KG
Foreign
Registered
office
Hofheim am
Taunus
Country
Germany
Parent
company
Share-
holding
2014
Share-
holding
2013
Note
11
50.00%
50.00%
152 Chadwick Materials Handling Ltd.
153 Bari Servizi Industriali S.C.A R.L.
154 EUROPA CARRELLI S.R.L.
Corsham
Modugno
Bastia Umbra
U.K.
Italy
Italy
155 Nordtruck AB
Örnsköldsvik
Sweden
156 Carretillas Elevadoras Sudeste S.A.
Murcia
Spain
157 Motorové závody JULI CZ s r.o.
Moravany u Brna Czech
Republic
47
62
64
75
88
11
48.00%
48.00%
25.00%
–
[1]
40.00%
40.00%
25.00%
25.00%
38.54%
38.53%
50.00%
50.00%
Other investments (at amortised cost)
Foreign
158 TPZ Linde Viličari Hrvatska d.o.o.
Zagreb
Croatia
11
20.00%
20.00%
[3]
[1] New during 2014
[2] Consolidated in accordance with IFRS 10 as structured entity as defined in IFRS 12
[3] No material influence
[R] Dormant company
We keep the world moving.KION GROUP AG | Annual Report 2014 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
237
Other disclosures
[46] AUDITORS’ FEES
[49] INFORMATION ON PREPARATION
AND APPROVAL
The fees recognised as an expense and paid to the auditors of
the consolidated financial statements in 2014 amounted to
The Executive Board of KION GROUP AG prepared the consoli-
€1.0 million (2013: €0.9 million) for the audit of the financial state-
dated financial statements on 10 March 2015 and approved them
ments, €0.4 million (2013: €1.4 million) for other attestation ser-
for forwarding to the Supervisory Board. The Supervisory Board
vices, €0.1 million (2013: €0.4 million) for tax consultancy services
has the task of examining and deciding whether to approve the
and €0.1 million (2013: €0.0 million) for other services.
consolidated financial statements.
[47] COMPLY-OR-EXPLAIN STATEMENT
REGARDING THE GERMAN COR-
PORATE GOVERNANCE CODE
(DCGK)
Wiesbaden, 10 March 2015
The Executive Board
Gordon Riske
Ching Pong Quek
In December 2014, the Executive Board and Supervisory Board
Dr Thomas Toepfer
of KION GROUP AG submitted their comply-or-explain statement
for 2014 relating to the recommendations of the German Corpo-
rate Governance Code government commission pursuant to sec-
tion 161 AktG. The comply-or-explain statement has been made
permanently available to shareholders on the website of KION
GROUP AG at kiongroup.com/comply_statement.
[48] EVENTS AFTER THE REPORTING
DATE
In the period after the end of the 2014 financial year up to
10 March 2015, there were no events or developments that would
have led to a material change in the recognition or measurement
of the individual assets and liabilities as at 31 December 2014 or
that it would be necessary to disclose.
We keep the world moving.KION GROUP AG | Annual Report 2014 238
Auditors’ opinion
We have audited the consolidated financial statements prepared
Our audit has not led to any reservations.
by KION GROUP AG, Wiesbaden/Germany, – comprising the
consolidated income statement, consolidated statement of com-
In our opinion, based on the findings of our audit, the consoli-
prehensive income, consolidated statement of financial position,
dated financial statements of KION GROUP AG, Wiesbaden /
consolidated statement of cash flows, consolidated statement of
Germany, comply with IFRS, as adopted by the EU, as well as the
changes in equity and the notes to the consolidated financial
regulations under German commercial law complementarily
statements - and the group management report for the business
applicable under Sec. 315a (1) German Commercial Code (HGB)
year from 1 January to 31 December 2014. The preparation of the
and give a true and fair view of the net assets, financial position
consolidated financial statements and the group management
and results of operations of the Group in accordance with these
report in accordance with IFRS, as adopted by the EU, as well as
requirements. The group management report is consistent with
the regulations under German commercial law complementarily
the consolidated financial statements and as a whole provides a
applicable under Sec. 315a (1) German Commercial Code (HGB)
suitable view of the Group’s position and suitably presents the
are the responsibility of the parent company’s Executive Board.
opportunities and risks of future development.
Our responsibility is to express an opinion on the consolidated
financial statements and on the group management report based
Frankfurt am Main / Germany, 10 March 2015
on our audit.
We conducted our audit of the consolidated financial statements
Wirtschaftsprüfungsgesellschaft
Deloitte & Touche GmbH
in accordance with Sec. 317 HGB (“German Commercial Code”)
and German generally accepted standards for the audit of finan-
cial statements promulgated by the Institut der Wirtschaftsprüfer.
Those standards require that we plan and perform the audit such
(Crampton)
(Gräbner-Vogel)
that misstatements materially affecting the presentation of the net
Wirtschaftsprüfer
Wirtschaftsprüferin
assets, financial position and results of operations in the consoli-
(German Public Auditor)
(German Public Auditor)
dated financial statements in accordance with the applicable
financial reporting framework and in the group management
report are detected with reasonable assurance. Knowledge of
the business activities and the economic and legal environment
of the Group and expectations as to possible misstatements are
taken into account in the determination of audit procedures. The
effectiveness of the accounting-related internal control system
and the evidence supporting the disclosures in the consolidated
financial statements and the group management report are
examined primarily on a test basis within the framework of the
audit. The audit includes assessing the annual financial state-
ments of those entities included in consolidation, the determina-
tion of entities to be included in consolidation, the accounting and
consolidation principles used and significant estimates made by
the Executive Board, as well as evaluating the overall presentation
of the consolidated financial statements and the group manage-
ment report. We believe that our audit provides a reasonable
basis for our opinion.
We keep the world moving.KION GROUP AG | Annual Report 2014
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
239
Auditors’ opinion
Responsibility statement
Responsibility statement
To the best of our knowledge, and in accordance with the applica-
ble reporting principles for consolidated financial reporting, the
consolidated financial statements give a true and fair view of the
financial performance and financial position of the Group, and the
management report of the Group includes a fair review of the
development and performance of the business and the position of
the Group, together with a description of the principal opportunities
and risks associated with the expected development of the Group.
Wiesbaden, 10 March 2015
The Executive Board
Gordon Riske
Ching Pong Quek
Dr Thomas Toepfer
We keep the world moving.KION GROUP AG | Annual Report 2014 ADDITIONAL INFORMATION
Contents
241
Additional Information
242
QUARTERLY INFORMATION
243
MULTI-YEAR OVERVIEW
244
DISCLAIMER
245
FINANCIAL CALENDAR
245
CONTACT
KION GROUP AG | Annual Report 2014
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242
Quarterly information
KION Group overview
in € million
Order intake
Revenue
EBIT
Adjusted EBIT
Adjusted EBIT margin
Adjusted EBITDA
Adjusted EBITDA margin
Q4 2014
1,311.0
1,305.6
109.4
134.2
10.3%
219.6
16.8%
Q3 2014
1,142.2
1,139.0
69.1
111.8
9.8%
196.0
17.2%
Q2 2014
1,227.9
1,144.4
91.5
109.5
9.6%
193.5
16.9%
TABLE 120
Q1 2014
1,196.1
1,088.9
77.0
87.4
8.0%
171.2
15.7%
We keep the world moving.KION GROUP AG | Annual Report 2014
ADDITIONAL INFORMATION
Quarterly information
Multi-year overview
Multi-year overview
KION Group multi-year overview
in € million
Order intake
Revenue
Order book 1
Results of operation
EBITDA
Adjusted EBITDA 2
Adjusted EBITDA margin 2
EBIT
Adjusted EBIT 2
Adjusted EBIT margin 2
2014
4,877.3
4,677.9
787.2
714.2
780.4
16.7%
347.0
442.9
9.5%
2013
4,489.1
4,494.6
693.3
708.8
721.5
16.1%
374.2
416.5
9.3%
2012 *
4,590.3
4,559.8
807.8
914.4
700.5
15.4%
549.1
408.3
9.0%
2011
4,681.9
4,368.4
953.0
569.2
665.3
15.2%
213.2
364.6
8.3%
243
TABLE 121
2010
3,859.7
3,534.5
801.3
380.2
462.2
13.1%
34.6
139.4
3.9%
Net income (loss) 3
178.2
138.4
161.4
– 92.9
– 196.7
Financial position 1
Total assets
Equity
Net financial debt
Cash flow
Free cash flow 4
Capital expenditure 5
6,128.5
1,647.1
810.7
6,026.4
1,610.0
979.3
6,213.2
660.7
1,790.1
6,066.3
– 487.6
2,631.3
5,758.9
– 399.9
2,626.0
305.9
133.1
195.6
125.8
513.6
155.1
230.8
133.0
72.4
123.5
Employees 6
22,669
22,273
21,215
21,862
19,968
* Key figures for 2012 were adjusted due to the retrospective application of IAS 19R (2011);
Order intake, Revenue, adjusted EBIT and adjusted EBITDA were aligned due to the Hydraulics Business
1 Values as at balance sheet date 31/12/
2 Adjusted for KION acquisition items and one-off items
3 Net income 2012 included a net gain from the Weichai transaction in the amount of €154.8 million
4 Free cash flow is defined as Cash flow from operating activities plus Cash flow used in investing activities.
Last year's figures were adjusted due to a change in presentation, for details see ‘Other disclosures on Consolidated statement of cash flows’
5 Capital expenditure including capitalised R&D costs, excluding leased and rental assets
6 Number of employees in full-time equivalents as at balance sheet date 31/12/
We keep the world moving.KION GROUP AG | Annual Report 2014
244
DISCLAIMER
Forward-looking statements
This annual report contains forward-looking statements that relate to the current plans,
objectives, forecasts and estimates of the management of KION GROUP AG. These
statements only take into account information that was available up and including the
date that this annual report was prepared. The management of KION GROUP AG
makes no guarantee that these forward-looking statements will prove to be right. The
future development of the KION GROUP AG and its subsidiaries and the results that are
actually achieved are subject to a variety of risks and uncertainties which could cause
actual events or results to differ significantly from those reflected in the forward-looking
statements. Many of these factors are beyond the control of KION GROUP AG and its
subsidiaries and therefore cannot be precisely predicted. Such factors include, but are
not limited to, changes in economic conditions and the competitive situation, changes
in the law, interest rate or exchange rate fluctuations, legal disputes and investigations,
and the availability of funds. These and other risks and uncertainties are set forth in the
2014 group management report. However, other factors could also have an adverse
effect on our business performance and results. The KION GROUP AG neither intends
to nor assumes any separate obligation to update forward-looking statements or to
change these to reflect events or developments that occur after the publication of this
annual report.
Rounding
Certain numbers in this annual report have been rounded up or down. There may there-
fore be discrepancies between the actual totals of the individual amounts in the tables
and the totals shown as well as between the numbers in the tables and the numbers
given in the corresponding analyses in the text of the annual report. All percentage
changes and key figures were calculated using the underlying data in thousands of
euros (€ thousand).
We keep the world moving.KION GROUP AG | Annual Report 2014 ADDITIONAL INFORMATION
Disclaimer
Financial calendar / Contact
245
FINANCIAL CALENDAR
CONTACT
19 March 2015
Contacts for the media
Contacts for investors
Financial statements press conference
Publication of 2014 annual report
Michael Hauger
Frank W. Herzog
7 May 2015
Phone: +49 (0) 611.770-655
Phone: +49 (0) 611.770-303
Interim report for the period ended
michael.hauger@kiongroup.com
frank.herzog@kiongroup.com
Head of Corporate Communications
Head of Corporate Finance
31 March 2015
12 May 2015
Frank Brandmaier
Dr Karoline Jung-Senssfelder
Head of Corporate Media Relations
Head of Investor Relations and M&A
Annual General Meeting
Phone: +49 (0) 611.770-752
Phone: +49 (0) 611.770-450
frank.brandmaier@kiongroup.com
karoline.jung-senssfelder@kiongroup.com
6 August 2015
Interim report for the period ended
30 June 2015
5 November 2015
Interim report for the nine months ended
30 September 2015
Subject to change without notice
Securities identification numbers
KION GROUP AG
This annual report is available in German
ISIN: DE000KGX8881
Abraham-Lincoln-Strasse 21
and English at kiongroup.com under
WKN: KGX888
65189 Wiesbaden | Germany
Investor Relations / Financial Reports.
Phone: +49 (0) 611.770-0
Fax: +49 (0) 611.770-269
info@kiongroup.com
www.kiongroup.com
Only the content of the German version
is authoritative.
We keep the world moving.KION GROUP AG | Annual Report 2014 KION GROUP AG
KION GROUP AG
Corporate Communications
Corporate Communications
Abraham-Lincoln-Strasse 21
Abraham-Lincoln-Strasse 21
65189 Wiesbaden | Germany
65189 Wiesbaden | Germany
Phone: +49 (0) 611.770-0
Tel. +49 (0) 611.770-0
Fax: +49 (0) 611.770-269
Fax +49 (0) 611.770-269
info@kiongroup.com
info@kiongroup.com
www.kiongroup.com
www.kiongroup.com
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